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Consumption-Leisure Preference Structure: A New Explanation of the Evans-Jovanovic Results for Entrepreneurial Choice

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Abstract

This paper extends Evans and Jovanovic’s (1989) (EJ) model to explicitly consider the latent entrepreneur’s consumption-leisure preference structure, and shows that an increase in his or her assets encourages entrepreneurial activity. This result indicates that EJ’s finding may hold without the assumption of liquidity constraints.

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Authors and Affiliations

  1. Graduate School of Systems and Information Engineering, University of Tsukuba, 1-1-1 Tennodai, Tsukuba, Ibaraki, 305-8573, Japan

    Nobuyuki Harada

  2. Department of Value and Decision Science, Tokyo Institute of Technology, 2-12-1 Ookayama Meguro-ku, Tokyo, 152-8552, Japan

    Kyoichi Kijima

Authors
  1. Nobuyuki Harada
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  2. Kyoichi Kijima
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Correspondence to Nobuyuki Harada.

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Harada, N., Kijima, K. Consumption-Leisure Preference Structure: A New Explanation of the Evans-Jovanovic Results for Entrepreneurial Choice. Small Bus Econ 24, 187–191 (2005). https://doi.org/10.1007/s11187-003-4300-7

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  • DOI: https://doi.org/10.1007/s11187-003-4300-7

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