Datasets:
olimiemma
/
MIT-OCW-Transcripts

Dataset card Data Studio Files
xet
 Community
1
text
stringlengths
0
205
it in this course.
I worked hard last night to
see if I could make the
algebra less complicated,
and I can't.
I just have to try to work
intuitively on this.
The notion of the income effect
is bigger the more
you're in the market.
You can think about
it for goods too.
Think about the income effect
of a change in the price of
something you buy a lot
of for something you
buy very little of.
So let's say you're someone
who's buying two Starbucks a
day, and you very rarely
go see a movie.
Well, if the price of a movie
goes up 10%, or the price of
Starbucks goes up 10%,
which is going to
make you feel poorer?
The price of Starbucks
going up, because you
buy a lot of Starbucks.
So how much poorer you'll feel,
or the income effect,
will depend on your
starting point.
The more you're in a market,
the more you'll feel the
income effect.
Now, based on that, who's going
to have a bigger income
effect, men or women?
Same person, what
do you think?
The income effect is going to be
stronger the more you're in
the market.
So who's going to have a
bigger income effect?
AUDIENCE: Married men would have
a bigger income effect.
PROFESSOR: Exactly.
Married men would have a bigger
income effect, because
they're in the market.
Married women, most of
them don't work.
So there's no income effect.
So this is going to be big for
men and small for women.
There's another issue,
which is does dh/dy
differ for men and women?
I'll leave that alone.
Let's assume they both have
the same underlying income