HOUSEHOLD PRODUCTION AND SOCIAL ACCOUNTING : A STUDY OF THE HOUSEHOLD ECONOMY OF SINGAPORE

Abstract

National income accounts have consistently and to a large extent ignored non-market econanic activities. This results in a great deal of misinformation and deficiencies in the final set of estimates. The thesis investigates the meaning and viability of deriving dollar estimates for the major type of economically productive but non-market activity namely that of household production. While certainly an old problem revisited, it was only until recently that renewed interest in the accounting of such non-marketed household production activities occured resulting from several progresses made in economic theory ( the 'New Home Economics' ) , data availability and improvements in data collection methods, and the increased desirability to reflect social welfare concerns as well as changes in the structural econany ( from non-market to market) in the product accounts. Despite some of these advances, there have remained some very serious conceptual and technical difficulties in measuring and valuing household production. Thus, difficulties exist with household production definition, quantification and the measurement of joint-prcrluction activities. Further, there appears to be much confusion over what is to be measured and hence valued. Consequently, the thesis first explores some of the theoretical and methodological issues behind household production research and suggest ways of resolving them. This departs from past studies which were either very empirically or mathematically based and which paid very little if not no attention to these problems. The thesis also suggests a new way of evaluating household production for social accounting purposes. The method suggested is shown to be consistent with social accounting practises. This is done through a mathematical model which formally shows that for social accounting purposes, it is the efficiency-adjusted replacement cost method that appears appropriate. This new method of evaluating household production is then applied to Singapore household data gathered from a survey involving 684 households. The results are then compared to past studies using the conventional valuation approaches. The empirical estimates generated on household production in Singapore further provide a basis for future research since to date, there has been no work done on the non-market household economy of Singapore. It is thus the first comprehensive and systemmatic study on household production in Singapore. such questions as: What is the order of magnitude of the value and quantity of household production in Singapore? What patterns of time-use exist in Singapore? Who are involved in household production and what is the nature of the goods and services produced? To what extent has capital substituted for labour within the home? How has changing home production patterns affected labour force participation rates for women? What factors determine a household's choice to hire market substitutes in the form of domestic help? These and many other micro-micro questions are discussed based on the empirical results of the household survey.