Household production function

from Wikipedia, the free encyclopedia

The household production function is an approach of production theory in which households temporarily assume the entrepreneurial role and use their knowledge, skills and time to produce household end products (direct goods) from market goods (indirect goods), which they then sell to themselves at the opportunity cost . The idea originally came from Gary Becker and Kelvin Lancaster in the 1960s.

example

A copy is not enough to read a newspaper. In addition, the consumer must also raise human capital in the form of literacy and understanding. Another important component is the amount of time that must be spent reading. Only then can the need for information be satisfied and the associated increase in wellbeing be achieved.

literature

  • Gary S. Becker: A Theory of the Allocation of Time in Economic Journal 75 (299), 1965.
  • Gary S. Becker and Gilbert Ghez: The Allocation of Time and Goods Over the Life Cycle . New York, 1975, Columbia University Press. ISBN 0-87014-514-2 .