Detecting household production
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Citation (published version)Marianne Baxter. "Detecting Household Production."
The economics of household choice has occupied an important position in both microeconomics and macroeconomics since Becker’s (1965) pioneering work. Yet our empirical understanding of the household sector is hampered by the absence of measurement of this sector’s output. Our paper contributes to our knowledge of the extent of home/market substitutions by utilizing detailed expenditure data provided by the Consumer Expenditure Survey (CEX). We compare expenditures by married, 1-earner households to expenditures by married, 2-earner households. Single-earner households have more non-market time that maybe be spent in home production or leisure. We detect the presence of several home/market substitutions across family types that are consistent with the theory.