EconPapers    
Economics at your fingertips  
 

Wealth, Tastes, and Entrepreneurial Choice

Erik Hurst () and Benjamin Pugsley ()

No 21644, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The non-pecuniary benefits of managing a small business are a first order consideration for many nascent entrepreneurs, yet the preference for business ownership is mostly ignored in models of entrepreneurship and occupational choice. In this paper, we study a population with varying entrepreneurial tastes and wealth in a simple general equilibrium model of occupational choice. This choice yields several important results: (1) entrepreneurship can be thought of as a normal good, generating wealth effects independent of financing constraints, (2) non-pecuniary entrepreneurs select into small scale firms, (3) subsidies designed to stimulate more business entry can have regressive distributional effects. Despite abstracting from other important considerations such as risk, financing constraints, and innovation, we show that non-pecuniary compensation is particularly relevant in discussions of small businesses.

JEL-codes: D21 D22 E24 L26 (search for similar items in EconPapers)
Date: 2015-10
Note: EFG PR
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (1) Track citations by RSS feed

Published as Wealth, Tastes, and Entrepreneurial Choice , Erik G. Hurst, Benjamin W. Pugsley. in Measuring Entrepreneurial Businesses: Current Knowledge and Challenges , Haltiwanger, Hurst, Miranda, and Schoar. 2017

Downloads: (external link)
http://www.nber.org/papers/w21644.pdf (application/pdf)
Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.

Related works:
Chapter: Wealth, Tastes, and Entrepreneurial Choice (2016) Downloads
Working Paper: Wealth, Tastes, and Entrepreneurial Choice (2015) Downloads
Working Paper: Wealth, tastes, and entrepreneurial choice (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:21644

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w21644
The price is Paper copy available by mail.

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Series data maintained by ().

 
Page updated 2017-10-06
Handle: RePEc:nbr:nberwo:21644