Population Research and Policy Review 23: 73–89, 2004.
© 2004 Kluwer Academic Publishers. Printed in the Netherlands.
Direct valuation of personal care by households
, JOHN FITZGERALD
& JOHN WICKS
Economics Department, The University of Montana, Missoula, Montana, USA;
Department, Bowdoin College, Brunswick, Maine, USA
Abstract. This paper valued the quantity of child, sick, and elderly care provided by house-
holds using a new, direct measure. Such measures add to the literature that estimates the size
of the contribution of non-market work by household members, particularly women, and to
literature about valuation of childcare. This production remains unvalued in standard national
income accounts. Traditional attempts to quantify this care multiplied care-giver hours by a
wage rate, a method that suffers from several drawbacks, including omitting the contributions
of anything but labor, the inability to handle joint production, and the use of an arbitrary wage
rate. This study avoided these problems by valuing the amount of care with its market price
based on data from a small urban area. The mean value was $3,547 annually (97 percent of it
childcare) for all sample households and $9,610 for those providing care. The results afforded
evidence of scale economies in parental childcare and quantiﬁed care furnished by different
kinds of providers.
Keywords: Childcare, Household production, Personal care
This study directly measured and valued the quantity of child, sick, and eld-
erly care (i.e., personal care) provided by households in a small urban area.
It deﬁned the quantity of care as the number of person-days of care where,
for example, a child-day of care was the total care received by one child
for one day of her life. Our ultimate goal is to obtain the closest possible
measure of the true value of household production. This study focuses on
personal care that comprises a signiﬁcant portion of household production.
Ideally, the value of personal care would be calculated following national
income accounting convention, but since household production is not sold
on the market, there is no public record of its quantity and value. However,
household surveys can ﬁnd the amount each household produces of various
household production types (e.g., childcare). Multiplying this quantity by the
market price of equivalent production (i.e., direct measurement) yields a good
estimate of value. We call this the direct measurement approach.
Both household production and its personal care component are important
for a number of reasons. Since they use scarce resources and provide human