The Rich or the Poor? Personal Resources, Do-it-yourself, and Innovation in the Household Sector

Abstract

Household sector innovation is significant in scale and scope and expected to increase, but has so far been studied in isolation and with mixed evidence regarding its antecedents. In this paper, we recognize that household sector innovation is embedded in the broader phenomenon of (Third-Wave) do-it-yourself (DIY) by consumers. Drawing on a literature review, we identify important parallels—e.g., both phenomena are driven by personal needs and/or process-related benefits. The main distinction is that household innovation results in goods with functional novelty, while DIY is broader and also includes homebuilt existing goods. We explore if studying household sector innovation and DIY in an integrated framework helps to resolve the inconsistent findings on the role of personal resources (income and discretionary time). Based on a neoclassical model in which agents maximize their allocation of time, we hypothesize that personal resources positively relate to DIY, but—given consumers’ engagement in DIY—negatively relate to innovation. Our theoretical findings suggest that consumers with more personal resources derive more process benefits from DIY, but crowd out individuals' focus on the function of their objects, hence, the likelihood that they are innovative. Using survey data from the United Arab Emirates (n = 2,728) we find evidence for our suppositions.