Why Time Deficits Matter: Implications for the Measurement of Poverty

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“Ajit Zacharias, Rania Antonopoulos and Thomas Masterson, (2013), Why Time Deficits Matter: Implications for the Measurement of Poverty, World Economics Association (WEA) Conferences, No. 1 2013, The political economy of economic metrics, 28th January to 14th March, 2013”

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Household production, defined in the narrow sense as production of services by members of the household for own consumption (such as cooking, cleaning, and childcare), have long been considered as an essential activity for maintaining living standards. In the latest UN System of National Accounts (SNA), the international statistical standard for the national accounts, these activities are recognized as making “an important contribution to economic welfare.”  This recognition  resonates well with the efforts that have been undertaken in various countries to develop methodologies to construct satellite accounts of household production. Most of the services resulting from household production can, at least in principle, be substituted by market equivalents; hence, such production by households has been considered as a type of in-kind income in studies of household income distribution. Typically, the approach is to add an imputed value of the time spent on household production to a relatively simple definition of pre-tax or post-tax money income and then examine its impact on measures of inequality. Research undertaken at the Levy Economics Institute since 2001 has focused on new methods of valuation and incorporating household production in a comprehensive measure of economic well-being rather than in a simple measure of money income.

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