The Value of Household Services

A family, in appraising the value of a housewife's services, does not necessarily consider the services of the housewife to be free even though there is no explicit money payment for her services. When the housewife devotes time to housekeeping, either she sacrifices leisure or the family sacrifices labor market income which the wife could earn. Empirical evidence supports the notion that families do not consider the supply price of housekeeping services to be zero. Traditional methods of assessing the aggregate value of household services lead to underestimates. The actual market wage rate is a good measure of the value of the marginal housekeeping services of a housewife who also spends time in the labor market. But the potential market wage rate of a full-time housewife understates the value of her marginal product in the home.