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Household production, home improvement, and housing investment among older Americans

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  • Murray, Tim
  • Dunn, Richard A.

Abstract

We investigate the role of household production in the context of home improvement and investment decisions of older Americans. To calculate the total value of home improvement, we apply a household production model where households can either purchase professional services or combine market goods with their time. We find that household production is a significant source of home investment. Failing to account for the value of time provided by household members greatly understates the total allocation of resources to home improvement. Consistent with standard household models, home production is a substitute for market-purchased services—labor supply is negatively related to the former and positively related to the latter.

Suggested Citation

  • Murray, Tim & Dunn, Richard A., 2022. "Household production, home improvement, and housing investment among older Americans," Journal of Housing Economics, Elsevier, vol. 56(C).
    • Handle: RePEc:eee:jhouse:v:56:y:2022:i:c:s1051137722000110
    DOI: 10.1016/j.jhe.2022.101836
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    More about this item

    Keywords

    Household production; Retirement; Housing equity; Home improvement;
    All these keywords.

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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