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HOUSEHOLD PRODUCTION AND CONSUMER DEMAND FUNCTIONS.

This paper considers the hypothesis that commodities purchased on the market by consumers are inputs into the production of goods within the household. Its implications for the family of consumer demand functions whose arguments are real income and relative prices are drawn and compared with those o...

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Published in:Econometrica Vol. 34; no. 3; pp. 699 - 709
Main Author: Muth, Richard F.
Format: Article
Published: Wiley-Blackwell Jul66
Subjects:
Demand function
Consumption (Economics)
Economic demand
Production (Economic theory)
Consumer goods
Consumers
Households
Mathematical models of economics
Mathematical functions
Online Access:View this record in EBSCOhost
Summary:This paper considers the hypothesis that commodities purchased on the market by consumers are inputs into the production of goods within the household. Its implications for the family of consumer demand functions whose arguments are real income and relative prices are drawn and compared with those of the hypothesis of additive separability. The paper closes with some examples of differences in commodity demand elasticities which are qualitatively consistent with the household production hypothesis and some comments upon how the latter might be utilized in empirical work.