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Microeconometrics of Consumer and Labour Supply Behaviour (MicroConLab)
Start date: Feb 1, 2014, End date: Jan 31, 2019 PROJECT  FINISHED 

The aim of this research programme is to significantly enhance our knowledge of consumer and labour supply behaviour using frontier microeconometric analysis. The objective is to improve our understanding of how individuals make choices, how they react to changes in the economic environment and how they respond to policy reforms. There are two key aspects to the proposed research. The first is to extend the analysis of consumer behaviour and revealed preference to allow for preference heterogeneity, many goods and taste change. A central part of this work will concern the imposition of shape restrictions that derive from revealed preference and integrability restrictions in the nonparametric analysis of consumer behaviour. This work will focus on the microeconometric analysis of consumer surveys and the nonparametric estimation of consumer demand at the household level. The second is a parallel set of studies that will examine the life-cycle behaviour of consumption and labour supply choices in a dynamic environment with uncertainty. This work will use panel data to investigate non-separabilities between consumption and labour supply. It will explore the role of family labour supply as a mechanism to ‘insure’ families against adverse economic shocks. It will involve bringing models of family earnings dynamics together with consumption decisions. The focus will be on the importance of non-separabilities, dynamics and heterogeneity in understanding the behavioural responses of consumption and family labour supply behaviour to policy reforms and other changes in the economic environment. Through a sequence of interrelated studies in these two broad areas, the research programme aims to radically move forward methodological approaches in empirical economics to modelling key aspects of household consumption and labour supply behaviour.

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