On Household Production Theory.

In terms of a correspondence for intrinsic qualities of consumption goods and a utility function preference structure for such qualities which does not assume that all semipositive vectors of qualities are at least as preferred as the null vector, an ordinal household production function is developed as the maximal utility level associated with a given commodity vector. Under homotheticity of preference structure the ordinal production function is cardinalized, and a constant utility price index is defined for commodity vectors. Household size is introduced as a variable to make more realistic the usual nonsatiation assumption for the preference structure, and the analysis is modified, showing that significant new relationships are obtained. Author