Two Perspectives on Preferences and Structural Transformation

Berthold Herrendorf, Richard Rogerson and Akos Valentinyi ()
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Akos Valentinyi: Institute of Economics - Hungarian Academy of Sciences

No 1134, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: We assess the empirical importance of income and price effects for structural transformation in the postwar US. We explain two natural approaches to the data: sectors may be categories of final expenditure or value added; e.g., the service sector may be the final expenditure on services or the value added from service industries. We estimate preferences for each approach and find that with final expenditure income effects are the dominant forces behind structural transformation whereas with value added categories price effects are dominant. We show how the input-output structure of the US economy can reconcile these findings.

Keywords: income effects; preferences; relative price effects; structural transformation (search for similar items in EconPapers)
JEL-codes: O11 O14 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2011-07
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Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Two Perspectives on Preferences and Structural Transformation (2013)
Working Paper: Two Perspectives on Preferences and Structural Transformation (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:has:discpr:1134

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