Household production function

The household production function is an approach to the theory of production, temporarily taking the entrepreneurial role in which households and from market goods ( indirect goods ) produced using their knowledge, skills and time budget end products ( direct goods ), which they sell to the opportunity cost to itself. The idea originally came from Gary Becker and Kelvin Lancaster in the 1960s.

Example

To read a newspaper is not the mere existence of the copy is sufficient. In addition, the consumer must also raise human capital in the form of reading skills and understanding. An essential component also represents the time which has to be applied for reading. Only thus can one satisfy the information needs and associated an increase in well-being can be achieved.