Empirical Economics

, Volume 7, Issue 1, pp 175–189 | Cite as

Estimating leisure goods models on time series of cross sections



This paper analyses the joint modelling of labour supply and consumer expenditure in a utility maximizing framework. A recent demand system (AIDS) is augmented to include labour supply and incorporate time series/cross section wage rate variation and, then, estimated on pooled F.E.S. data [Family Expenditure Surveys]. A method of non linear FIML is applied. The paper questions the near unanimous ‘evidence’ on backward bending labour supply in previous studies and, using counter evidence, argues that such a bend could have been partly due to the restrictive utility forms usually employed. In addition, hypotheses relating to effects of price/wage movements on composition of ‘full income’ are tested, and the welfare implications of the estimated parameter estimates worked out.


Labour Supply Real Wage Demand System Budget Share Household Budget Survey 
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Copyright information

© Physica-Verlag 1982

Authors and Affiliations

  • R. Ray
    • 1
  1. 1.Faculty of Economic and Social StudiesUniversity of ManchesterManchesterUK

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