The labour response of handloom weavers in Papua New Guinea : a study of money-leisure choice in a transitional Melanesian economy

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.

Author dc:creator

• Philp, Norman Ernest

Language dc:language.iso

en

Dc Identifier Other

b1014560

OAI identifier oai:identifier

oai:openresearch-repository.anu.edu.au:1885/130343