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

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2006-11-01
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Economics

The Department of Economic Science was founded in 1898 to teach economic theory as a truth of industrial life, and was very much concerned with applying economics to business and industry, particularly agriculture. Between 1910 and 1967 it showed the growing influence of other social studies, such as sociology, history, and political science. Today it encompasses the majors of Agricultural Business (preparing for agricultural finance and management), Business Economics, and Economics (for advanced studies in business or economics or for careers in financing, management, insurance, etc).

History
The Department of Economic Science was founded in 1898 under the Division of Industrial Science (later College of Liberal Arts and Sciences); it became co-directed by the Division of Agriculture in 1919. In 1910 it became the Department of Economics and Political Science. In 1913 it became the Department of Applied Economics and Social Science; in 1924 it became the Department of Economics, History, and Sociology; in 1931 it became the Department of Economics and Sociology. In 1967 it became the Department of Economics, and in 2007 it became co-directed by the Colleges of Agriculture and Life Sciences, Liberal Arts and Sciences, and Business.

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1898–present

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  • Department of Economic Science (1898–1910)
  • Department of Economics and Political Science (1910-1913)
  • Department of Applied Economics and Social Science (1913–1924)
  • Department of Economics, History and Sociology (1924–1931)
  • Department of Economics and Sociology (1931–1967)

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Abstract

This paper examines the changing structure of U.S. household production over the post-World War II period. We apply production theory in order to define a new set of inputs for U.S. households and use newly constructed data so as to examine with the aid of a relatively simple complete household aggregate demand system. The goal is to extent our understanding of the changing structure of the U.S. household sector over the post-World War II period, including the demand for inputs of women’s and men’s housework or unpaid household labor and seven other aggregate input categories. The econometric estimate of the demand system yields plausible price and income elasticities for nine input groups. The own-price elasticity of demand for women’s and men’s housework is shown to be sizeable and similar in size. Women’s and men’s housework are also shown to be complements, 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 services are shown to be much better substitutes for men’s housework than for women’s housework. Also, men’s unpaid housework, household transportation input, recreation input, and “other inputs,” which are largely men’s and women’s leisure time, are luxury goods; and women’s unpaid housework, food at home, housing input, and household appliance input are normal goods. Purchased housework substitute services have an income elasticity that is not significantly different from zero. These results are obtained while controlling for the impacts of trend dominated factors. The methodology applied here has implications for cost of living comparisons over the post-War II period.

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