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

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.