| Summary: | The article focuses on the substantial interest in the theory and estimation of models of labour supply and the joint demand for goods. Neoclassical versions of such models assume that households face parametric prices and wages and can therefore choose hours of employment and quantities of goods according to linear budget constraints. The technique of analysis places heavy reliance on duality theory. The basic duality principle is that preferences or technology, which are defined on goods, are under perfect markets, mirrored by dual relationships defined on prices, which directly link behaviour with preferences or technology. This is particularly convenient when one is interested in the implications for preferences of restrictions on market behavior. The article takes up a theorem, which is concerned with aggregating demand functions and labour supply functions, defined not on full income but on non-labour income. It is concerned with a concept of aggregation in which the representative income level is still mean income but the representative wage rate is some non-linear function of the wage distribution.
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