HOUSEHOLD ECONOMICS

Household economics analyses all decisions made by households at both the micro-economic and macro-economic level. One influential tradition based on the New Home Economics emphasises the role of household production and takes a micro-economic perspective. It includes unitary models conceiving of the household as a unified decision-making unit and models recognising that individual members of multi-person households keep their own preferences and constraints. Applications include all decisions possibly made by households, such as labor supply, consumption, savings, demand for health, time uses other than paid work, household financial arrangements, migration, marriage and divorce, other sexual behavior, fertility, demand for education, intergenerational transfers, and home-leaving by adult children. Household economists are interested in the effects of a wide range of government policies on household decision-making. Many of these applications of household economics have been pursued independently, but recently there is a tendency for more integration and cross-fertilization between the various models that can be classified under the umbrella of ‘household economics’