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The Demand for Variety: A Household Production Perspective

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  • Reuben Gronau

    (Rosita and Esteban Herczeg Professor of Economics Emeritus, Hebrew University, and research associate, National Bureau of Economic Research)

  • Daniel S. Hamermesh

    (Edward Everett Hale Centennial Professor of Economics, University of Texas at Austin, and research associate, IZA and NBER)

Abstract

Economists have devoted substantial attention to firms' supply of variety, but little to consumers' demand for variety. Employing the framework of home production, we trace differences in demand to differences in the opportunity costs of activities, associated with investments in human capital. Schooling alters time costs and changes the variety of activities household members choose. Time budgets from Australia, Israel, and West Germany show that higher own and spouses' incomes raise variety (suggesting positive income effects). Education increases variety independent of income and earnings; part of its impact goes beyond a correlation of educational attainment with preferences for variety. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal The Review of Economics and Statistics.

Volume (Year): 90 (2008)
Issue (Month): 3 (August)
Pages: 562-572

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Handle: RePEc:tpr:restat:v:90:y:2008:i:3:p:562-572

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  1. Salop, Steven, 1977. "The Noisy Monopolist: Imperfect Information, Price Dispersion and Price Discrimination," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 44(3), pages 393-406, October.
  2. Hamermesh, Daniel S. & Gronau, Reuben, 2007. "The Demand for Variety: A Household Production Perspective," IZA Discussion Papers 2767, Institute for the Study of Labor (IZA).
  3. Jackson, Laurence Fraser, 1984. "Hierarchic Demand and the Engel Curve for Variety," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 66(1), pages 8-15, February.
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  10. Daniel S. Hamermesh, 2002. "Timing, togetherness and time windfalls," Journal of Population Economics, Springer, Springer, vol. 15(4), pages 601-623.
  11. Kooreman, P. & Kapteyn, A.J., 1987. "A disaggregrated analysis of the allocation of time within the household," Open Access publications from Tilburg University, Tilburg University urn:nbn:nl:ui:12-364357, Tilburg University.
  12. Daniel S. Hamermesh & Jungmin Lee, 2007. "Stressed Out on Four Continents: Time Crunch or Yuppie Kvetch?," The Review of Economics and Statistics, MIT Press, MIT Press, vol. 89(2), pages 374-383, May.
  13. Bound, John, et al, 1994. "Evidence on the Validity of Cross-Sectional and Longitudinal Labor Market Data," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 12(3), pages 345-68, July.
  14. Reuben Gronau & R. Layard, . "Home Production - A Survey," University of Chicago - Population Research Center, Chicago - Population Research Center 85-2, Chicago - Population Research Center.
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  16. Jay Stewart, 2006. "Assessing alternative dissimilarity indexes for comparing activity profiles," electronic International Journal of Time Use Research, Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)) and The International Association for Time Use Research (IATUR), Research Institute on Professions (Forschungsinstitut Freie Berufe (FFB)) and The International Association for Time Use Research (IATUR), vol. 3(1), pages 49-59, August.
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