ABSTRACT
Authors develop a model of household behaviour that considers both the labour supply and commodity demand decisions of the household. They analyse male and female participation decisions jointly with the demand for goods. They should always model female labour supply as well as male labour supply as it is likely that female participation is at least as responsive to price, income and demographic changes. In order to introduce equivalence scales into a system of household expenditure and labour supply equations and in order to test the separability hypothesis, a fully integrable model of household behaviour is essential. By modelling the female participation decision as well as the male labour supply decision, authors were left with a model containing a limited dependent variable. A model that is only non-linear in parameters is of considerable advantage and authors hope to have struck a reasonable balance between realism and simplicity.
