@article{10.1093/restud/rdae052,
    author = {Ferraro, Domenico and Valaitis, Vytautas},
    title = {Consumption Quality and Employment Across the Wealth Distribution},
    journal = {The Review of Economic Studies},
    volume = {92},
    number = {3},
    pages = {1801-1836},
    year = {2025},
    month = {05},
    abstract = {In the U.S., market hours worked are approximately flat across the wealth distribution. Accounting for this phenomenon is a standing challenge for standard heterogeneous-agent macro models. In these models, wealthier households consume more and work fewer hours. We propose a theory that generates the cross-sectional wealth-hours relation as in the data. We quantify this theory in a heterogeneous-agent incomplete-markets model with three key features: a quality choice in consumption, non-homothetic preferences, and a multi-sector production structure. We show that the model produces consumption expenditure patterns consistent with the data and realistic “quality Engel curves”.},
    issn = {0034-6527},
    doi = {10.1093/restud/rdae052},
    url = {https://doi.org/10.1093/restud/rdae052},
    eprint = {https://academic.oup.com/restud/article-pdf/92/3/1801/58063577/rdae052.pdf},
}