Financial Inclusion in Papua New Guinea

HH Utility • Cobb-Douglas Utility: c (j) = Y/p (j) for all goods j ⚫ home-produced goods: c (j) = L/a (j) traded good: c (j) = wL/p (j) = L/ (aª (1 + d) (1+ t)). Non-FI HH (indirect) utility In UNF = √ In In -dj + a (j) S In L = - 0 1 In L ae (1+ d) (1+t) dj „ª³ In a (j) dj − (1 − ji ) In aº (1 + d) (1+ t) - - • If HH becomes Fl, t (d) fall to zero, cut-off good given by a (j): = ae (1+ d) FI HH (direct) utility In UFI Davies & Nettuno = S² In Li 1 Li dj + -dj a' (j) jz ae (1+ d) = In Li- - In a (j) dj (1j2) In aº (1 + d) 590 Financial Inclusion in Papua New Guinea August 4, 2022 16/36

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