Scharf, Kim; Smith, Sarah - 2010
constraints place restrictions on D
t
. The household value function in period
t<Ris given by
V
t
(A
t
,h
t−1
,p
t
,w
t
,x
t …
)= max
{c
t
,h
t
,l
t
}
{u(c
t
,h
t
,l
t
)+βE
t
V
t+1
(A
t+1
,h
t
,p
t+1
,w
t+1
,x
t+1
)}
where, in addition to the variables … already defined, the variables (p
t
,w
t
,x
t
) are the price of housing, the
female wage, and male earnings, and the values …