Article
Slutsky Equation and Negative Elasticity of Labor Supply: behavioral bias or optimal consumption-leisure choice?
Expert Journal of Economics
(2014)
Abstract
One of the applications of the prospect theory is the behavioral phenomenon of the negative elasticity of the individual labor supply. This working paper argues that the negative elasticity of labor supply can be understood better with the help of the interpretation of the Slutsky equation with regard to the common consumption-leisure choice.
Keywords
- Slutsky equation,
- prospect theory,
- labor supply,
- consumption-leisure choice
Disciplines
Publication Date
Summer July 21, 2014
Citation Information
Sergey V. Malakhov. "Slutsky Equation and Negative Elasticity of Labor Supply: behavioral bias or optimal consumption-leisure choice?" Expert Journal of Economics Vol. 2 (2014) Available at: http://works.bepress.com/sergey_malakhov/9/