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Home production, market substitutes, and the labor supply of mothers

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  • Bar-El, Ronen
  • Hatsor, Limor
  • Tobol, Yossef

Abstract

We study the interaction among the home production of food, the market for industrialized food, and the labor supply of mothers. For this, we introduce a model of child nutrition based on two substitutes. Industrialized food is produced in an imperfectly competitive market where its price, quality, and quantity are endogenously determined. Home-produced food is superior in quality but is time-consuming to make and, thus, entails opportunity costs for mothers. We derive the equilibrium and the socially optimal quality of industrialized food. Finally, we suggest government policies to boost the labor supply of mothers and social welfare, including setting regulatory quality standards and supporting technological changes in the production of industrialized and homemade food.

Suggested Citation

  • Bar-El, Ronen & Hatsor, Limor & Tobol, Yossef, 2020. "Home production, market substitutes, and the labor supply of mothers," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 378-390.
    • Handle: RePEc:eee:jeborg:v:171:y:2020:i:c:p:378-390
    DOI: 10.1016/j.jebo.2020.01.007
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    More about this item

    Keywords

    Government policy; Home production; Labor supply; Product quality;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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