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Your Money or Your Life?

Teklé Palm, Michael LU (2011) NEKK01 20111
Department of Economics
Abstract
The theory of the hedonic wage model and compensating wage differentials dates back to the times of Adam Smith, and this study attempts to investigate, using econometric analysis, whether the Swedish labor market can give any claim to these theories. A brief background to the health economics discipline is followed by relevant theory and research in the field of compensating wage differentials. Using an alternative approach based on the wage change equation formulated by Charles Brown, and comparing the results to a previous study by Duncan and Holmlund, an econometric analysis is then performed. The empirical results do not yield any clear evidence in any direction regarding the existence of compensating wage differentials, although some... (More)
The theory of the hedonic wage model and compensating wage differentials dates back to the times of Adam Smith, and this study attempts to investigate, using econometric analysis, whether the Swedish labor market can give any claim to these theories. A brief background to the health economics discipline is followed by relevant theory and research in the field of compensating wage differentials. Using an alternative approach based on the wage change equation formulated by Charles Brown, and comparing the results to a previous study by Duncan and Holmlund, an econometric analysis is then performed. The empirical results do not yield any clear evidence in any direction regarding the existence of compensating wage differentials, although some indications appear supporting the theory of limited omitted variable bias and measurement error using the wage change equation in place of a conventional wage level equation. (Less)
Please use this url to cite or link to this publication:
author
Teklé Palm, Michael LU
supervisor
organization
course
NEKK01 20111
year
type
M2 - Bachelor Degree
subject
keywords
SOFI, LNU, Hedonic Wage Function, Health Economics, Compensating Wage Differentials, Wage Change Equation
language
English
id
2153128
date added to LUP
2011-09-06 07:05:12
date last changed
2011-09-06 07:05:12
@misc{2153128,
  abstract     = {The theory of the hedonic wage model and compensating wage differentials dates back to the times of Adam Smith, and this study attempts to investigate, using econometric analysis, whether the Swedish labor market can give any claim to these theories. A brief background to the health economics discipline is followed by relevant theory and research in the field of compensating wage differentials. Using an alternative approach based on the wage change equation formulated by Charles Brown, and comparing the results to a previous study by Duncan and Holmlund, an econometric analysis is then performed. The empirical results do not yield any clear evidence in any direction regarding the existence of compensating wage differentials, although some indications appear supporting the theory of limited omitted variable bias and measurement error using the wage change equation in place of a conventional wage level equation.},
  author       = {Teklé Palm, Michael},
  keyword      = {SOFI,LNU,Hedonic Wage Function,Health Economics,Compensating Wage Differentials,Wage Change Equation},
  language     = {eng},
  note         = {Student Paper},
  title        = {Your Money or Your Life?},
  year         = {2011},
}