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The Marriage Motive: A Price Theory of Marriage pp 167–189Cite as

A Consumption Theory with Competitive Markets for Work-in-Household

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Abstract

Earlier home production models of consumption have considered households as one coordinated decision-making unit. Instead, this chapter assumes that individuals who are either married or considering marriage continue to be independent decision-makers after they form couples. In light of the concepts of Work-In-Household (WiHo, a particular type of household production benefiting a spouse) and its price (see Chap. 2), and assuming that traditional gender roles prevail, an analysis of markets where women are WiHo-workers and men WiHo-users leads to novel implications for the study of consumption. It follows from the model that there will be a gender gap in the price elasticity of commercial goods that could be home-produced. This helps explain, among other implications, why women may pay more for dry-cleaning than men. Sex ratio effects on consumption are also predicted: for example, it is predicted that in countries with more emigration of men than women, women will be expected to make higher contributions to newlyweds’ costs of housing. It is also shown how compensating differentials in marriage associated with various types of husband/wife matches could also be associated with different consumption patterns. For instance, relative to women married to men who are close to their own age, women married to considerably older men are predicted to have relatively more control over the use of the couple’s income and they may consume more goods that benefit them personally.

I dedicate this chapter to the late H. Gregg-Lewis for it uses techniques he taught in a graduate labor economics course I took at the University of Chicago in 1973–1974 (This chapter is adapted from Grossbard-Shechtman Shoshana. 2003. A consumer theory with competitive markets for work in marriage. Journal of Socio-Economics 31(6):609–645. http://www-rohan.sdsu.edu/faculty/sgs/documents/consumption_paper_JSE2003.pdf. I thank Marina Adshade, George Davis, and Joni Hersch for helpful comments).

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Notes

  1. 1.

    Grossman (1972) is a consumption model to the extent that it models household demand for health care services.

  2. 2.

    Z is called a “commodity,” following Becker (1965).

  3. 3.

    Oana Tocoian points out that restaurants may also price discriminate in terms of spousal WiHo availability when they only issue coupons that cannot be used by single customers (free entree with purchase of another, dinner for two for X dollars, etc.).

  4. 4.

    I thank Victoria Vernon for calculating these numbers specially for this book.

  5. 5.

    Barbara Bergmann, personal communication. Her observation is based on data she collected with the help of students in the Washington, DC area. Some states, including California, have banned gender-based price differentials in dry-cleaning services (see also Cohen 1999).

  6. 6.

    Women, thus, seem to get penalized twice by men’s unwillingness to do their wives’ laundry. First, women rarely have the option of relying on that form of help in the home. Second, they may get charged more for commercial services if they go to the cleaners, as a result of their lower elasticity of demand which in turn is partially explained by the low levels of WiHo that men supply.

  7. 7.

    Again, this assumes that sellers can take advantage of buyers’ less elastic demand.

  8. 8.

    See Davis (2014) for a review of FAH versus FAFH and the implications for nutrition and Health.

  9. 9.

    Prices may be stable if supply side outpaced the demand side, assuming nothing else on the demand side changed.

  10. 10.

    The demand for frozen dinners aimed at children is expected to be very price-elastic as both mothers and fathers may possibly substitute for their children’s cooking activities.

  11. 11.

    Testing for this will be very complicated, for there may also be some gender differences in the symbolic value of a car. Also, it has been documented that relative to men women are worse at bargaining prices down.

  12. 12.

    A spouse’s time is likely to be a better substitute for the time of professional services than is the case with own time.

  13. 13.

    I have borrowed the term “role reboot” from .

  14. 14.

    John Treble contributed this citation.

  15. 15.

    A more ambitious treatment of WiHo and shared consumption commodities is found in my WOC model in Grossbard-Shechtman (2003a).

  16. 16.

    Another factor affecting the disutility of spousal labor is whether small amounts of WiHo are being supplied. This idea can also be found in Blau et al. (1998, Ch. 3). Also, see Amy Wax (1998).

  17. 17.

    I thank Marina Adshade (who can be followed @dollarsandsex) for this insight.

  18. 18.

    I thank Marina Adshade for this insight.

  19. 19.

    The model also leads to a demand for WiHo contributed by a spouse, hj, and a supply of labor li. The model could be extended to include the derivation of a supply of own WiHo, hj.

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Authors and Affiliations

  1. San Diego State University and IZA, San Diego, California, USA

    Shoshana Grossbard

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Grossbard, S. (2015). A Consumption Theory with Competitive Markets for Work-in-Household. In: The Marriage Motive: A Price Theory of Marriage. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-1623-4_10

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