Arts & Culture

Generate income through household production

There are many goods and services which are more profitable to perform at home

written by David Fright
March 4, 2016 12:01 am

In economic terms, household production refers to the daily household activities such as vacuuming or washing dishes which are performed outside of the market-based economy and are not counted in standard measures of national economic output. However, these activities also contribute to household income through the “well-being” they provide—a term used to refer to the benefit derived from the consumption of the goods and services purchased through the market economy using monetary income. While there are many goods and services that are not practical for most people to produce at home, there are many which are. One way to measure the profitability of producing these goods or services at home is to compare what it would have cost to purchase them in a store against the time it takes to produce them yourself. My research in this area indicates that I generate the equivalent of $1650 in annual income at an average wage of $16 per hour through household production.

The most profitable of these activities includes insulating my drafty apartment in winter, returning bottles to the depot, baking bread, and purchasing household items on sale or in bulk. Each of these activities generates a respective hourly income of $47, $30, $15, or, in the case of purchasing items on sale or in bulk, a 300 per cent or more return on the money used to “invest” in them. For example, it takes me roughly three hours of labour to prepare my drafty apartment for winter by sealing closed some of my windows or forming “gaskets” with duct tape to help them keep out drafts better. I also put up cardboard heat barriers behind my curtains at night or use clear plastic film to better insulate against the cold glass surfaces. This saves about $140 in heating costs per winter at average of ($140/3 hours=$47 per hour of work). Returning bottles and cans to the recycling depot on my way to the grocery store takes about 10 minutes of extra time per trip. Six trips, therefore, take 60 minutes, or one hour, of extra time. Returning $5 of bottles each trip, therefore, generates the equivalent of $5 x 6= $30/hour in income. I can actually carry $10 worth of cans, but I don’t have the storage space. In this case, the returns would double to $60/hour. Although the total amount of income generated is small, the rate, or profit, at which it is earned is high. For instance, sardines typically retail for $1.39 per can, but go on sale almost monthly for $.99, a savings of $.40. As a student, I typically eat three cans of sardines a week, or roughly 12 cans a month. At a total savings of $.40/can, purchasing 12 cans saves $4.80, and investing $12 in a sardine inventory generates a return-on-investment of $4.80/$12=40% per month, or 480% per year.

The same is true of toothpaste and toothbrushes, and the calculation is also the same for items purchased in bulk at a reduced price. As I discussed in a previous article, baking bread is similarly profitable. Other highly profitable forms of household production include drying clothes on a rack instead of paying to use a machine and walking instead of taking the bus. Prior to the advent of the U-Pass, taking the bus to school only saved about 15 minutes of walking. The bus would take 30 minutes, and I could walk in 45. 15 minutes of extra walking at a savings of $2.50 over taking the bus is equivalent to $10 for every 60 minutes, or $10/hour. One implication of this is that it may be more profitable, in some cases, from a societal perspective to invest in walking or bicycling infrastructure, such as covered walk-ways or segregated bike lanes, than it is to invest in mass transit.

Household production is easy, convenient, and an excellent way to generate extra income.

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