Are time and money equally substitutable for all commodity groups in the household’s domestic production?

Carla Canelas (1, 2) , François Gardes (2, 3) , Philip Merrigan (4, 5) , Silvia Salazar (6)

1 AUP - The American University of Paris
2 CES - Centre d'économie de la Sorbonne
3 PSE - Paris School of Economics
4 UQAM - Université du Québec à Montréal = University of Québec in Montréal
5 ESG - Ecole des Sciences de la Gestion
6 BCEC - Bankwest Curtin Economics Centre [Perth, Curtin University]

This article uses time-use and household expenditure data to measure the substitutability between time and money within the Beckerian household production framework. The elasticity of substitution is estimated for five commodity groups and across two developing countries: Ecuador and Guatemala. The estimated elasticities are positive, indicating substitutability, and much larger for all other goods compared to food. Our results raise some interesting questions regarding the policy effects of an intervention that does not consider the money/time trade-offs in consumption.

Domaines: Economies et finances

Carla Canelas, François Gardes, Philip Merrigan, Silvia Salazar. Are time and money equally substitutable for all commodity groups in the household’s domestic production?. Review of Economics of the Household, 2019, 17 (1), pp.267-285. ⟨10.1007/s11150-018-9425-1⟩. ⟨hal-03281842⟩