Measurement of the value of homemaker's time: an empirical test of the alternative methods of the opportunity cost approach

Household production is typically measured by estimating the time that the homemaker spends in the various household activities. The focus in this paper was on valuating the household production time of Canadian full-time homemakers. Four variants of the opportunity cost approach, namely, imputed wage, potential wage, Heckman's two-stage reservation wage, and Kidd's reservation wage were used to estimate and compare homemaker's time. The results indicate that the four different variants yielded different estimates of the value of household production time. One of the main conclusions is that Heckman's two-stage reservation wage approach, albeit having the advantage of correcting selection bias, it produced a wide range for the estimated reservation wage, which led us to doubt its reliability as a practical measure of the value of household production time.