Distribution of Economic Resources: Implications of Including Household Production

The value of household production is estimated to 40–50 percent of GNP in most western countries, and because the distribution of this income‐in‐kind is different from ordinary income distribution, the concept of economic well‐being may include household production. The monetary value of household production is evaluated by a market alternative principle and an opportunity‐cost principle. In the last case a reservation wage is estimated, and integrated in a modified opportunity principle, which means that household work of non‐working women is evaluated by the reservation wage, and household work of working women and men by their wage‐rate. The conclusions are among others, that the inclusion of household production reduces the inequality, and that the women's contributions—money income and household production—functions as income equalizers.