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Consumers often choose not directly from the
commodities In economics, a commodity is an economic good, usually a resource, that has full or substantial fungibility: that is, the market treats instances of the good as equivalent or nearly so with no regard to who produced them. The price of a co ...
that they purchase but from commodities they transform into goods through a household
production function In economics, a production function gives the technological relation between quantities of physical inputs and quantities of output of goods. The production function is one of the key concepts of mainstream neoclassical theories, used to define ...
. It is these goods that they value. The idea was originally proposed by
Gary Becker Gary Stanley Becker (; December 2, 1930 – May 3, 2014) was an American economist who received the 1992 Nobel Memorial Prize in Economic Sciences. He was a professor of economics and sociology at the University of Chicago, and was a leader of ...
,
Kelvin Lancaster Kelvin John Lancaster (10 December 1924 – 23 July 1999) was an Australian mathematical economist and John Bates Clark professor of economics at Columbia University. He is best known for the development of the Theory of the Second Best with ...
, and
Richard Muth Richard Ferris Muth (May 14, 1927 – April 10, 2018) was an American economist, who is considered to be one of the founders of urban economics (along with William Alonso and Edwin Mills). Muth obtained his Ph.D. from the University of Chicago ...
in the mid-1960s. The idea was introduced simultaneously into
macroeconomics Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole. For example, using interest rates, taxes, and ...
in two separate papers by
Jess Benhabib Jess Benhabib (born 9 June 1948) is a professor at New York University, and known for his contributions to growth theory and sunspot equilibria. Benhabib earned his Ph.D. from Columbia University in 1976. He started his teaching career as an as ...
,
Richard Rogerson Richard Donald Rogerson is an American economist who is currently the Charles and Marie Robertson Professor of Public and International Affairs at Princeton University, where he is also the Director of the Louis A. Simpson Center for the Study of ...
, and
Randall Wright Randall D. Wright (born August 4, 1956) is a Canadian academic macroeconomist who advanced the fields of monetary economics and labor economics through his role in the development of matching theory. Biography Wright obtained a B.A. in Econ ...
(1991); and Jeremy Greenwood and
Zvi Hercowitz Zvi Hercowitz (born December 21, 1945 in Rosario, Argentina) is professor emeritus at Tel Aviv University's School of Economics and has been a member of the montetary committee of the Bank of Israel since 2017. He emigrated to Israel in 1969 and ...
(1991). Household production theory has been used to explain the rise in married female labor-force participation over the course of the 20th century, as the result of labor-saving appliances. More recently with the rise of the
DIY "Do it yourself" ("DIY") is the method of building, modifying, or repairing things by oneself without the direct aid of professionals or certified experts. Academic research has described DIY as behaviors where "individuals use raw and sem ...
or
Maker movement The maker culture is a contemporary subculture representing a technology-based extension of DIY culture that intersects with hardware-oriented parts of hacker culture and revels in the creation of new devices as well as tinkering with existing on ...
household production has become more sophisticated. For example, consumers can now convert plastic wire into high-value products with inexpensive
3-D printers 3D printing or additive manufacturing is the construction of a three-dimensional object from a CAD model or a digital 3D model. It can be done in a variety of processes in which material is deposited, joined or solidified under computer co ...
in their own homes.Emergence of Home Manufacturing in the Developed World: Return on Investment for Open-Source 3-D Printers
''Technologies'' 2017, 5(1), 7; doi:10.3390/technologies5010007


Example

A simple example of this is baking a
cake Cake is a flour confection made from flour, sugar, and other ingredients, and is usually baked. In their oldest forms, cakes were modifications of bread, but cakes now cover a wide range of preparations that can be simple or elaborate ...
. The consumer purchases flour, eggs, and sugar and then uses labor, know-how, time and other resources producing a cake. The consumer did not really want the flour, sugar, or eggs, but purchased them to produce the cake for consumption (instead of buying it, e.g., from a bakery).


See also

*
Family economics Family economics applies economic concepts such as production, division of labor, distribution, and decision making to the family. It is used to explain outcomes unique to family—such as marriage, the decision to have children, fertility, po ...
*
New Home Economics Gary Stanley Becker (; December 2, 1930 – May 3, 2014) was an American economist who received the 1992 Nobel Memorial Prize in Economic Sciences. He was a professor of economics and sociology at the University of Chicago, and was a leader of ...


References


Further reading

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HUP descr.
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Abstract.
* * Family economics Consumer behaviour {{microeconomics-stub