This study deals with household production. The subject is defined as activities with an outcome that can be substituted for that of the work of others. Household production is a part of the unrecorded, informal sector, and a number of previous studies have shown that this subsector is quite large. Estimates of the value of household production suggest that it measures between 20 to 50 per cent of GNP in industrialized countries.However, it is disputable how to measure this value and the results depend heavily on what kind of measures that have been used.
Much attention has been paid to measurements and descriptions of household production but there seems to be less interest in the determinants of this activity. In this study, a model is developed and discussed based on neoclassical microeconomic theory of consumption and the allocation of time. Time and expenditures (goods) arc regarded as being inputs in household production, and the opportunity of substitution between these inputs is emphasized.
However, an economic model presumes economic behavior. In this case, this means that households attempt to maximize their utility. If behavior is dctcrmim;d by other means- or no specific means at all -the economic model becomes irrelevant. If preferences are unknown- which they usually are- the rationality of consumption choices is not possible to verify or refute. The different use of time and expenditures by thehouseholds may, however, be regarded as more "objective" choices of production methods which are determined by tangible economic factors- funds of time, money and human and real capital in the households.
In the empirical part of the study, the importance of these economic factors is examined for household production in the food sector. Total expenditures on food together with the purchase of time-saving andexpenditure-saving foodstuffs are analyzed' against measures of the funds of time and money in the households. Variables that may indicate differences in productivity are·also tested. The data used is a Swedishexpenditure survey of 1978. The results can be summarized as follows:
1. There is a clear pattern that shows that households tend to trade in money for time, and vice versa. Hence, variables which can be given an economic interpretation prove to be of significant importance. Examplesof such variables are income and working hours. Also, larger households seem to take advantage of the economies of scale that are related to food preparation.
2. Although significant, the "economic" variables explain only I0-20% of the variation between the households. Other important determinants are age and (for single adult households) gender.
3. The influence of the economic variables per se is roughly the same for females and males and in different stages in the life cycle.
An economic model can only partly explain household production behavior. The study emphasizes the need for data that cover both time-use and expenditures. In order to get a better explanation of the behavior it seems necessary to use a model based on economic theory together with, for instance, sociology and psychology.
Linköping: Linköpings universitet , 1989. , 141 p.
1989-10-06, Sal Elysion, Hus-T, Universitetsområdet Valla, Linköping, 10:15 (Swedish)