ABSTRACT
Any justification for studying the personal characteristics of entrepreneurs implies a rejection of the view that new firms are formed in response to changes in relative prices. If, for example, Baumol’s view of the entrepreneur is accepted, i.e. that of an automaton reacting passively to a change in the expected profits in industry i, then the characteristics of the entrepreneur, either as an individual or as a member of a group, become irrelevant. Once, however, it is shown that certain groups or types of individuals react differently to incentives the ‘supply-side’ of entrepreneurship becomes more important. If there are groups within society which require less stimulus to enter business then the higher the proportion of the population in this group the more responsive will society as a whole be to changes in the relative prices of self-employment, unemployment and paid employment. These groups may be characterised according to social class, religious affinity, education levels, etc.
