Does Home Production Drive Structural Transformation?

Alessio Moro, Solmaz Moslehi () and Alessi Moro
Authors registered in the RePEc Author Service: Alessio Moro

No 20-15, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: Using new home production data for the U.S., we estimate a model of structural transformation with a home production sector, allowing for both non-homotheticity of preferences and differential productivity growth in each sector. We report three main findings. First, the data support a specification with a different income elasticity of market and home services. Second, the non-homotheticity can account alone for the decline in the home services share, while non-homotheticity and price effects together are responsible for the rise of market services. Third, the slowdown in home labor productivity, started in the late 70s, is a key determinant of the late acceleration of the share of market services. We use the estimated model to run a counterfactual experiment and find that, by keeping the growth rate of home labor productivity as before 1978, the model displays a share of market services in consumption expenditure lowered by 6.9% in 2010.

Pages: 32 pages
Date: 2015-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Does Home Production Drive Structural Transformation? (2017)
Working Paper: Does home production drive structural transformation? (2016)
Working Paper: Does Home Production Drive Structural Transformation? (2015)
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