Understanding Post-War Changes in U.S. HouseholdProduction: A Full-Income Demand-System Perspective

This paper examines the aggregate demand for inputs, including housework and otherservices, used by the US household sector to produce home goods that directly provide them utilityover the post-World War II period. By assuming that households produce a commodity called homegoods and that constant returns to scale and skill intensity of women’s (and men’s) housework areunchanged after incorporating a set of controls, I fit an almost-ideal-demand system to a panel of USaggregate annual data over the forty nine year period 1948-1996. The econometric estimate of thedemand system yields plausible macro price and income demand elasticities for nine input groups.The results include that the own-price elasticities of demand for women’s and men’s housework areshown to be sizeable and similar in magnitude. Women’s and men’s housework are also shown to becomplements, rather than substitutes, but the other seven input categories are substitutes for women’s(and men’s) unpaid housework. Purchased housework substitutes and household appliance servicesare shown to be better substitutes for men’s housework than for women's housework. Also, men’sunpaid housework, household transportation input, recreation input, and “other inputs” are luxurygoods; and women’s unpaid housework, food at home, housing input, and household appliance inputare normal goods. These results are obtained while controlling for the impacts of trend. The resultshave implications for the changing time intensity of production in the US household sector and costof living comparisons over the post-World War II period.[...]