Income and Substitution Effects in Labor Economics: Difference between revisions
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| ==Opportunity Cost of Leisure Time==
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| One of the main factors that plays a role when analyzing the income and substitution effects is the opportunity cost of leisure time. The importance that a laborer places on leisure time when compared with the want to increase one's income will play the role in determining, which effect will dominate. If there is greater importance on leisure time, than increased income, the income effect will dominate. If their is greater importance on income than leisure time, substitution effect will dominate.
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Revision as of 04:18, 3 May 2006
