The hedonic wage function is the locus of points that illustrates the relationsh

Question

The hedonic wage function is the locus of points that illustrates the relationship between the wage that workers get paid and job characteristics. All else equal, the more pollutants miner breathe while working in a mine, the worse off the miners are. However, miners vary in their degree of dislike for breathing in pollutants. Given the current distribution of perfectly competitive firms and technologies for cleaning up pollutants, a hedonic wage function comes about. Suppose the distribution of mines and technologies remains fixed, but, due to a public relations campaign by the American Cancer Society, all potential miners change their preferences so that they dislike breathing in pollutants event more. a. what will happen to the hedonic wage function after the public relations campaign? b. what will happen to where each individual miner locates on the hedonic wage function?

Explanation / Answer

a)function will become more steep

b) value changes very frequently

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