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Family and Consumer Sciences Research Journal
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Estimating the Value of Home Work Time: The Impact of Income Taxes

William R. Bryan

Department of Finance, University of Illinois, Urbana, IL 61820

Charles M. Linke

Department of Finance, University of Illinois, Urbana, IL 61820

According to research reported earlier (Zick and Bryant, 1983), estimates of the value of home work time based on the cost of purchasing substitutes in the market are systematically lower than values implied by reservation wages. We argue that much of this differential reflects differences in the tax status of market purchases as compared with the underlying variable captured in the concept of a reservation price. Specifically, market prices are specified on an after-tax basis; reservation prices are most meaningfully viewed on a pre-tax basis. Evidence is presented that is consistent with this view.

Family and Consumer Sciences Research Journal, Vol. 14, No. 1, 171-172 (1985)
DOI: 10.1177/1077727X8501400117
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