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The Allocation and Valuation of Time

Author

Listed:
  • Diewert, Erwin
  • FOX, Kevin J.
  • Paul Schreyer

Abstract

We provide a generalization of Becker's theory of the allocation of time. We assume that household time plays three roles: as leisure, household work and household labour supply, with separate utility valuations for each use of time. A case not considered by Becker, nor by Pollak and Wachter, is addressed; the case where the household does not provide external market labour. Various corner solutions to the household's time allocation problem are considered in detail, and we consider the econometric problems that these corner solutions create. We relate the analysis to the difficult problems associated with the valuation of household work at home.

Suggested Citation

  • Diewert, Erwin & FOX, Kevin J. & Paul Schreyer, 2017. "The Allocation and Valuation of Time," Microeconomics.ca working papers erwin_diewert-2017-5, Vancouver School of Economics, revised 04 May 2017.
    • Handle: RePEc:ubc:pmicro:erwin_diewert-2017-5
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    File URL: http://econ.sites.olt.ubc.ca/files/2017/05/pdf_paper_erwin-diewert-17-04-AllocationandValuationetc.pdf
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    References listed on IDEAS

    as
    1. William A. Barnett, 2004. "Pollak and Wachter on the Household Production Function Approach," Contributions to Economic Analysis, in: Functional Structure and Approximation in Econometrics, pages 435-444, Emerald Group Publishing Limited.
    2. Dale W. Jorgenson & J. Steven Landefeld & Paul Schreyer, 2014. "Measuring Economic Sustainability and Progress," NBER Books, National Bureau of Economic Research, Inc, number jorg12-1, March.
    3. J. Steven Landefeld & Stephanie H. McCulla, 2000. "Accounting For Nonmarket Household Production Within A National Accounts Framework," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(3), pages 289-307, September.
    4. Pollak, Robert A & Wachter, Michael L, 1977. "Reply: "Pollak and Wachter on the Household Production Approach."," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 1083-1086, October.
    5. Paul Schreyer & W. Erwin Diewert, 2014. "Household Production, Leisure, and Living Standards," NBER Chapters, in: Measuring Economic Sustainability and Progress, pages 89-114, National Bureau of Economic Research, Inc.
    6. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
    7. 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.
    8. W. E. Diewert, 1973. "Afriat and Revealed Preference Theory," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 40(3), pages 419-425.
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    More about this item

    Keywords

    Valuation of household time; replacement cost valuation of time; opportunity cost valuation of time; household production;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts

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