Slutsky equation and negative elasticity of labor supply: behavioral bias or optimal consumption-leisure choice?

Sergey Malakhov

MPRA Paper from University Library of Munich, Germany

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 (search for similar items in EconPapers)
JEL-codes: D11 (search for similar items in EconPapers)
Date: 2014-02-21
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Citations: View citations in EconPapers (2)

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https://mpra.ub.uni-muenchen.de/53871/1/MPRA_paper_53871.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/55751/1/MPRA_paper_55751.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/57700/1/MPRA_paper_57700.pdf revised version (application/pdf)

Related works:
Journal Article: Slutsky Equation and Negative Elasticity of Labor Supply: Behavioral Bias or Optimal Consumption-Leisure Choice? (2014)
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