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- Title
Impatient in Experiments, but Patient in Simulations: A Challenge to the Heckman-Type Model.
- Authors
Gahramanov, Emin; Tang, Xueli
- Abstract
Intertemporal labour-leisure choice models typically assume agents have a very low degree of impatience. Yet there is a lot of empirical evidence indicating a high degree of impatience. Using a life-cycle model of consumption-saving and labour-leisure choice, we show that even if an agent displays a relatively moderate degree of impatience, his labour supply choice delivers highly counterfactual patterns. We resolve this counterfactual finding by augmenting the standard model with a time-dependent marginal utility of leisure assumption that is consistent with some recent evidences from leisure studies. We also introduce various extensions and discuss their relative importance and associated challenges.
- Subjects
STATISTICAL models; PATIENCE; SIMULATION methods &; models; LIFE cycle hypothesis (Economic theory); LABOR supply
- Publication
Economic Record, 2016, Vol 92, Issue 297, p268
- ISSN
0013-0249
- Publication type
Article
- DOI
10.1111/1475-4932.12244