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Consumption Time in Household Production: Implications for the Goods-Time Elasticity of Substitution

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  • Baral, Ranju
  • Davis, George C.
  • You, Wen

Abstract

The relationship between the goods-time elasticity of substitution with consumption time as an input and the goods-time elasticity of substitution without consumption time as an input is derived analytically. Under some reasonable assumptions, the goods-time elasticity of substitution is shown to be greater if consumption time is not included as an input. An empirical example of food production for single headed households is consistent with this result and indicates the goods-time elasticity of substitution is about 60% greater when consumption time is not included as an input than when it is included.

Suggested Citation

  • Baral, Ranju & Davis, George C. & You, Wen, 2010. "Consumption Time in Household Production: Implications for the Goods-Time Elasticity of Substitution," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61184, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:61184
    DOI: 10.22004/ag.econ.61184
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    References listed on IDEAS

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    1. Hamermesh, Daniel S., 2007. "AJAE Appendix: Time to Eat: Household Production Under Increasing Income Inequality," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 89(4), pages 1-8, November.
    2. Murphy, Kevin M & Topel, Robert H, 2002. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 88-97, January.
    3. Charles Blackorby & Daniel Primont & R. Russell, 2007. "The Morishima gross elasticity of substitution," Journal of Productivity Analysis, Springer, vol. 28(3), pages 203-208, December.
    4. George C. Davis & C. Richard Shumway, 1996. "To Tell the Truth about Interpreting the Morishima Elasticity of Substitution," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 44(2), pages 173-182, July.
    5. Hamermesh, Daniel S., 2008. "Direct estimates of household production," Economics Letters, Elsevier, vol. 98(1), pages 31-34, January.
    6. Pollak, Robert A & Wachter, Michael L, 1975. "The Relevance of the Household Production Function and Its Implications for the Allocation of Time," Journal of Political Economy, University of Chicago Press, vol. 83(2), pages 255-277, April.
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    Cited by:

    1. Carla Canelas & François Gardes & Philip Merrigan & Silvia Salazar, 2019. "Are time and money equally substitutable for all commodity groups in the household’s domestic production?," Review of Economics of the Household, Springer, vol. 17(1), pages 267-285, March.
    2. Scharadin, Benjamin, 2022. "The efficacy of the dependent care deduction at maintaining diet quality," Food Policy, Elsevier, vol. 107(C).
    3. Juan Du & Takeshi Yagihashi, 2017. "Goods–Time Elasticity of Substitution in Health Production," Health Economics, John Wiley & Sons, Ltd., vol. 26(11), pages 1474-1478, November.
    4. Tamar Khitarishvili & Fernando Rios Avila & Kijong Kim, 2015. "Direct Estimates of Food and Eating Production Function Parameters for 2004–12 Using an ATUS/CE Synthetic Dataset," Economics Working Paper Archive wp_836, Levy Economics Institute.
    5. Davis, George C. & You, Wen, 2013. "Estimates of returns to scale, elasticity of substitution, and the thrifty food plan meal poverty rate from a direct household meal production function," Food Policy, Elsevier, vol. 43(C), pages 204-212.
    6. Park, Sihyun & Vecchi, Martina & Jaenicke, Edward & Fan, Linlin & Liu, Yizao, 2023. "Mechanisms between Time Scarcity and Healthfulness of Food Choices: Evidence from a Lab Experiment," 2023 Annual Meeting, July 23-25, Washington D.C. 335662, Agricultural and Applied Economics Association.
    7. George Davis, 2014. "Food at home production and consumption: implications for nutrition quality and policy," Review of Economics of the Household, Springer, vol. 12(3), pages 565-588, September.

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