The Relevance of the Household Production Function and Its Implications for the Allocation of Time

Abstract

This paper provides a critique of the household production function approach and its application to the allocation of time. It is argued that many applications of the model, especially those making use of implicit "commodity prices," require that the household's technology exhibit constant returns and no joint production; otherwise, implicit commodity prices depend on the household's preferences as well as on its technology and the prices of market goods. Furthermore, joint production is pervasive in situations involving the allocation of time. In situations where household production theory does not provide a satisfactory framework for analysis, the paper suggests alternative approaches.