The labour response of handloom weavers in Papua New Guinea : a study of money-leisure choice in a transitional Melanesian economy
Date
1976
Authors
Philp, Norman Ernest
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Abstract
The final analysis is then carried out by the construction
and evaluation of an appropriate econometric model of labour leisure
choice derived from a particular (viz., Stone-Geary)
form of the utility function. The Stone-Geary based demand
for leisure function so derived is consistent with the basic
premises of modern consumer and utility theory and is shown
to contain characteristics which make it particularly
relevant to demand analysis in transitional economies of the
Melanesian type. A simple extension of the usual Stone-Geary
model enables several important socio-demographic and
institutional factors to be incorporated in the analysis.
When applied to the field data set, the extended Stone-
Geary model is shown to account for approximately 6 5 per cent
of the variation observed in the effective labour input of
the weaver sample. It is also shown that factors other than
variations in real earning rates and non-weaving household
incomes (the more familiar economic variables) explain a very
large proportion of the total variation in the effective work
effort supplied by the sampled weavers. The elasticity of
the effective labour time supplied to weaving with respect to
variations in weaving earning rates (nw ) is calculated from
the parameter estimates. The values obtained indicate that
the labour response of the "representative" weaver to earning
rate variations is slightly negative and very inelastic
(i.e. n,w, estimates ranged from -.06 to -.11), although, as
will be explained, there may be some negative bias in these
results.
Such a response is neither "irrational" nor "perverse".
In fact, it is perfectly consistent with the consumer demand
theory and the basic premises of rational economic choice
from which the empirical model is derived. The result
indicates simply that, on average, any market inducements to
increase the total number of effective man-hours supplied to
an industry such as weaving will, in an economy of the type
studied herein, have to rely more on such additional sources
of manpower that might be attracted away from other industries
and sectors as its own earning rates rise relative to others,
rather than on the willingness of existing workers to forego
additional units of their leisure time.
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