Household production & the law

• Main Authors: Chia, Joycelyn Kit Yee, Ng, Sherlyn Su Lin, Tan, Bo Yao
• Other Authors: Quah Teong Ewe, Euston
• Format: Final Year Project
• Language: English
• Published: 2018
• Subjects: DRNTU::Business::General::Economic and business aspects
• Online Access: http://hdl.handle.net/10356/73879
• Institution: Nanyang Technological University

How much does a plate of chicken rice cost in Singapore? When asked, most people would be able to answer this question. What about non-market goods such as household production? It is not a common practice to ask how much an hour of household chores done by a homemaker is worth. This paper studied the current legal framework with regards to how to the law values household production, specifically in tort and matrimonial settlement cases. Methods such as the Contingency Valuation Method (CVM), Ordinary Least Square (OLS) regression, Maximum Likelihood Estimation (MLE), the Ordered Probit and Ordered Logit Model were used to obtained the Willingness to Pay (WTP) for reduction of hours of household production. The WTP for the average respondent was found to be $12.44 for 1 hour, $24.10 for 2 hours and $34.99 for 3 hours. This displays a diminishing willingness to pay and hence implies a diminishing marginal benefit from reduction in hours of housework. Heterogeneous effects were observed across the different groups of respondents. The WTP for main housework contributor was observed to be $14.87 for 1 hour which is $3.78 more than that of a non-main housework contributor. The results suggest that individuals who are main homemaker are likely to value homemaking more than someone who is not the main homemaker and hence, has an increased willingness to pay to reduce time spent on homemaking. The WTP obtained provides an additional method to the courts to better determine a fair compensation to the homemakers.