TABLE C-1 A Comparison of the Value of Time in Two Households

 

Household Composition

Factors in Valuing Time

A: One Adult

B: Two Adults

Official Poverty Threshold, 1992a

$7,143

$9,137

Relation of Thresholds

1.00

1.28

Time Allocation, Weekly Hours

 

 

Total

168

336

Personal care (subtract)

-70

-140

Discretionary, net

98

196

Needed to earn poverty threshold @$3.57/hour (subtract)

-40

-51

Available, net

58

145

Available per person, net

58

72.5

Valuing the Nonmarket Time

 

 

Hours available per week

58

145

Annual value @$3.57/hour

$10,353

$25,882

Assuming No Scale Economies in Nonmarket Time

 

 

Scale

1.00

2.00

Monetary equivalent

$10,353

$20,706

Extra resources for B

$5,176

Assuming the Same Scale Economies in Nonmarket Time as in Money Usage

 

 

Scale

1.00

1.28

Monetary equivalent

$10,353

$13,252

Extra resources for B

$12,630

a Weighted averages from Bureau of the Census (1993c: Table A).

week. After subtracting these work hours, household B has 145 hours available for all remaining activities.

If the two households have exactly met their poverty threshold level of income, and all adults have the same (arbitrarily set) hourly wage rate, then the two households are equally well off in terms of economic resources. That is, after all, just what these poverty threshold levels are supposed to achieve. But notice that in household B, the remaining discretionary time is a total of 145 hours or 72.5 hours per person; in household A it is 58 hours. This fact highlights the underlying issue: having set poverty threshold levels of income for households A and B that reflect the economies of scale in living together (putting aside whether the scale economies are correctly measured or not) necessarily results in the larger household's having more discretionary time per adult than the smaller household. Thus, the two households are not equally



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