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Wage Inertia and Comparison Effects in Australian Award Wage Determination, 1964‐74

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  • P. K. TRIVEDI
  • J. RAYNER

Abstract

This paper attempts to explain the determination of average award wage changes without assuming that the outcome of certain strategic wage settlements is known. Models which allow for habit‐inertia and comparison effects are constructed. It is argued that the main impact of these factors is on the specification and interpretation of lagged adjustment of wages to changes in its determinants. These models are empirically tested using the pre‐indexation quarterly data. An analysis of 1973‐74 wage experience is also provided.

Suggested Citation

  • P. K. Trivedi & J. Rayner, 1978. "Wage Inertia and Comparison Effects in Australian Award Wage Determination, 1964‐74," The Economic Record, The Economic Society of Australia, vol. 54(2), pages 195-218, August.
    • Handle: RePEc:bla:ecorec:v:54:y:1978:i:2:p:195-218
    DOI: 10.1111/j.1475-4932.1978.tb00330.x
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    References listed on IDEAS

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    Cited by:

    1. Michael G. Kirby, 1981. "An Investigation of the Specification and Stability of the Australian Aggregate Wage Equation," The Economic Record, The Economic Society of Australia, vol. 57(1), pages 35-46, March.
    2. R.M. Simes & C.J. Richardson, 1987. "Wage Determination In Australia," The Economic Record, The Economic Society of Australia, vol. 63(2), pages 144-155, June.
    3. Calvin D. Siebert & Mahmood A. Zaidi, 1984. "The Relation Between Profits and the Rate of Change of Money Wages in Australia," Australian Journal of Management, Australian School of Business, vol. 9(1), pages 121-129, June.
    4. E. A. Boehm, 1984. "Money Wages, Consumer Prices, and Causality in Australia," The Economic Record, The Economic Society of Australia, vol. 60(3), pages 236-251, September.

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