Home-produced Goods Research Articles

Using theory for measurement: An analysis of the cyclical behavior of home production

A significant amount of economic activity takes place within the home. Unfortunately, it is difficult to assess the cyclical properties of home production because the available data are too sporadic. Using a real business cycle (RBC) model, we construct quarterly data on three variables that are unobservable at a quarterly frequency: hours worked in the home sector, hours spent in leisure, and the consumption of home-produced goods. Three results emerge: leisure is countercyclical while nonmarket hours are acyclical; hours spent in home production have declined significantly since the 1970s; fluctuations in market output are a good measure of fluctuations in individual utility as long as home and market consumption are either extreme complements or extreme substitutes in the production of utility.

Piecing Together Child Care with Multiple Arrangements: Crazy Quilt or Preferred Pattern for Employed Parents of Preschool Children?

Hofferth and Phillips (1987) project that by 1995 two-thirds of preschool children will have an employed mother; this means that arranging substitute child care will be a necessity for the majority of families with preschool children. Families use a variety of strategies to provide substitute care when a single parent or both parents are employed. Parents may share care by having nonoverlapping work schedules, or they may use relatives for child care, or take the child to a family day care home or day care center. Research investigating the effects of child care costs, availability, and preferences on both women's employment and child care decisions has generally focused on the primary care arrangement. In reality, however, a significant proportion of families with preschool children use multiple care arrangements to enable them to meet work and family responsibilities. In two recent national surveys, 36% to 38% of preschool children with employed mothers had multiple care providers (Folk & Beller, 1993; Hofferth, Brayfield, Deich, & Holcomb, 1991). In this article, we explore possible reasons for the significant proportion of families using multiple care by examining (a) the patterns of combinations of child care types used and (b) the factors that increase the likelihood of using multiple care providers. We expand on previous research by providing a detailed description of both types and amounts of child care used by married and single mothers. In addition, we examine multiple care combinations used by families with either one or two preschool children. Previous research has examined multiple care for only one child in the family. FACTORS RELATED TO MULTIPLE CARE ARRANGEMENTS Neoclassical economic models of the household assume that parents derive satisfaction from consuming market- and home-produced goods and services, producing and enjoying children, and from leisure (Becker, 1981). In Blau's (1991) model of child care quality, parents simultaneously choose a child care provider, a set of market, goods and services, and an amount of nonwork time in order to maximize their satisfaction given their budget constraint. The budget constraint is determined by income (given a chosen work allocation) and prices of goods and services. According to Blau (1991), choice of a child care provider is based not only on desired quality of substitute child care, but also on a parent's preferences for consumer goods, leisure time, a desire for a provider with shared values, religion, and/or ethnicity, and advantages such as convenience, proximity, or reliability of the care provider. Trade-offs will occur among all these preferences based on their relative costs and perceived benefits. For example, parents might be willing to choose a child care provider less likely to foster the child's intellectual development in return for greater convenience or reliability of the arrangement. Using Blau's (1991) framework, we consider possible trade-offs that may affect the choice of using multiple care providers rather than a single care arrangement. In the following review, we examine previous research findings regarding the relationship between parental preferences, budget constraints, and other constraints and the use of multiple care. Parental Preferences Preferences for a provider with shared values, religion, or ethnic background (Blau, 1991) may lead parents to provide care themselves or to use an available relative. Limited availability of parents or relatives could lead parents to combine preferred care by a family member with other types of child care. For example, father's time availability for child care while the mother is employed is limited by the full-time work week of most married males. This constraint explains why fathers are more likely to provide care when the mother works part-time, and/or works a nonday shift (Presser, 1989) and why multiple care is more common when the father is the main provider of care (U. …

The Depression and the Administration in South-Central Cameroun

production patterns and local economic structures. Political historians, on the other hand, tend to periodize the interwar period differently, and point out that colonial policy hardly changed during the entire two decades.2 They suggest, as some colonial administrators themselves also claimed, that the Depression and the following years was a time of great strain between rapidly altering economic conditions and stagnation in policy from the metropolitan governments.3 Writing on the French colonial service, William Cohen calls the interwar years The Era of Lost Opportunities. At the local level, however, both the administrators and indigenous populations were forced to integrate economics with politics without directives and without control over the intruding forces of the world economy. Although some developments seem to have been general throughout rural west Africa-the extension of commodity production, for example--in many other respects the experience of African peoples in their relationship with both the state and the market differed from one locality to another and one commodity to another. In his history of postwar Camerounian politics, Richard Joseph therefore looks to the 1930s to explain the source of the political diversity that emerged after 1945.4 Victor Levine argues that the Camerounian colonial state came through the Depression in fine style, running up very few debts and quickly re-establishing solvency.5 A French administrator during that time observed that the people also survived; they returned to home-produced goods for consumption and suffered severe hardships mainly due to repressive measures to extort head taxes from them.6 But the sudden plunge in prices had a profound and long-term effect on particular groups, as each section of the population, from the French administration to the peasantry struggled to maintain their steadily eroding position. This paper discusses the confrontation of political exigencies and economic realities during the Depression in the

Consistent Estimation of Expenditure Elasticities from Cross-Section Data on Households Producing Partly for Subsistence

JN estimating Engel curves, it is common to use total expenditure in place of income as an explanatory variable. Summers [6] has shown that least-squares estimators will then be inconsistent. More recently, Liviatan [4] has shown that using income as an instrumental variable will permit consistent and relatively efficient estimation of the expenditure elasticities. However, when the sample consists of households in a less-developed country (LDC) that produce partly for subsistence, there are further sources of bias. Estimates may be asymptotically biased because of the spread between the buying and selling price of many food items in a partial subsistence economy; a household that is a net buyer of an item is confronted with a higher effective price than a household that is a net seller. Also, the arbitrary valuation of home-produced goods introduces possibly serious errors of observation with respect to both the regressand and regressor, resulting in the usual errors-in-variables bias. This paper discusses these sources of bias, presents a method for obtaining consistent estimates of the parameters in the Engel relationship, and applies the method to a sample of 816 households in rural Kenya.'

Monetary and Fiscal Policy for an Economy with Fixed Exchange Rates

The exchange rate can be a powerful instrument for control over the balance of payments. Variations in the rate of exchange generally alter the relationship between prices of home-produced goods and commodities produced abroad and thus directly affect the major elements in the current account. A commitment to fixed exchange rates therefore involves the sacrifice of a major policy instrument and raises the question of how to reconcile domestic goals, such as achieving full employment or stimulating economic growth, with the preservation of equilibrium in the balance of payments. In a classical world in which prices and wages are flexible in both directions other routes are available for altering the relationship between domestic and foreign costs and thus for maintaining payments equilibrium. It is in a world of rigid prices that the policy problems posed for an economy tied to a fixed rate of exchange become most acute, and it is a simple model of such a world that I wish to analyze in this paper. A rich literature in recent years has suggested that both internal balance (full employment) and external balance may be achieved by an appropriate mix of monetary and fiscal policy.1 By pointing out that balance-ofpayments equilibrium can be reached by changes in the capital account as well as (or instead of) the current account, this literature has suggested that an expansion of employment that upsets the balance of trade can be countered by a contractionary monetary policy that raises interest rates and attracts capital flows. However, when complications have been introduced

Economic Growth and International Trade in a Simple Dynamic Leontief Model

Traditional Keynesian trade multipliers ignore intermediate goods. Professors Harrod and Johnson have considered them in a limited sense; both used a one-sector model. The objects of this paper are: to consider the effect of intermediate goods on the trade multiplier by use of a matrix trade multiplier; to consider their effect on the rate of growth of both exports and outputs of commodities; and to discuss the stability conditions of a balanced growth rate in a simple dynamic Leontief model.Harrod took intermediate goods into account only as a deduction from exports or investments when he considered the multiplier process. Johnson considered them more explicitly. In his model, an economy uses a primary factor of production, say labour, and foreign-made intermediate goods to produce consumption goods. However, the economy does not use home-produced intermediate goods, and all home-produced goods are consumption goods (so that the economy exports only consumption goods). In a more realistic model, the autonomous increment of demand for investments or exports would create two kinds of multiplier processes: one through the increment of demand for home-produced consumption goods, the other through the demand for home-produced intermediate goods. Each industry uses a primary factor of production and both home-made and foreign-made intermediate goods. Consumers demand both domestic and foreign consumption goods.