No collusion

The kids still haven't colluded against us in our sealed-bid tender process for the household chores.

I go through it over in our Insights newsletter. 

The Tender Years

Despite all your predictions to the contrary, the children still have not colluded against me.

On finding out that the Crampton household’s way of divvying up the chores is somewhat nonstandard, I reported on it in a May 2018 Insights column in case others might find it helpful. I was honestly a bit surprised that nobody else seemed to have figured out this obvious solution.

For specific chores that go over and above the ordinary household expectations, we use a sealed-bid tendering system. We put up the chores we would like to have done; the children submit their bids to perform those chores; we announce the winners of the chores and then tell each child, privately, what they will earn for completing them. The system works well. Whenever one of the children complains about chores, we point out that we have another contractor available to pick up the task instead. And the task gets done.

Many of you warned me, by email, that the children were likely to collude against us. But the children do not know the true maximum we might we willing to pay for any chore. And we committed to not necessarily accepting the lowest bid, or indeed any bid. The government also helps by prohibiting other families from hiring our young children to perform tasks in their households instead at higher rates, so we enjoy some helpful monopsony powers.

Two weeks ago, we put the chores up again for tender as it had been a while, and one of the children was very keen to be rid of the cat box contract.

Results? The child tired of cleaning the cat box put in a very high bid for that service and lowballed the bid for mopping and vacuuming while the child who knew that the cat box had become more contestable did not increase the bid for that service.

We are paying about the same amount overall, with a task-swap between the two children – and, crucially, with both children very happy with the swap instead of fighting about who would have to clean the cat box.

So there has been, as yet, no collusion. Even if they do eventually wind up colluding against us, they will have learned valuable lessons in cooperation. And that is okay too.

I love that the system made it dead simple to effect a task-flip without discord. I would otherwise have expected that one child's expressing extreme distaste with the task would make the other one less willing to take it up. Instead, the tendering process solved it.

It's a bit like the argument that the great thing about voting is that it lets you change the government without a war.

Why not Becker?

I think Becker's model of the family is just a little more generalizable than Erin Fletcher suggests:

Much of the dominant thinking in family and household economics has roots in Gary Becker’s A Treatise on the Family. It rests on ideas that can only politely be called antiquated. Women are in charge of domestic production (cleaning, child-rearing, cooking, laundry, etc) and men are in charge of bringing home the bacon. It’s specialization at the household level. Very economist-y. On some level, it probably made a lot of sense to think about marriage in this manner, particularly when women’s wages were much, much lower than men’s. In fact, it made so much sense that it partly earned Becker a Nobel Prize in Economics.

At some point during my fourth year of graduate school, I ordered my own copy. It was a simple (though really expensive!) purchase. A paperback, just a book, but a book that essentially formed much of the dominant thinking in my field. Even then, I knew its time in the spotlight was waning. I’ve still never read the whole thing. Despite knowing it was a classic, I can still only look up passages when I think they’re relevant. Reading more than a few pages makes the feminist in me absolutely boil.

Surely all you need is that one of the partners has a comparative advantage in domestic production. Ignore the husband/wife framing; it's an artefact of its time. But note too that biology weights things: maternity necessarily imposes a larger burden on female workplace production than does paternity. And, where couples' skills are similar and both weighted towards production outside of the home, we get outsourcing.

And this is where the Brooklyn jerky specialist comes in. He's actually making a product that homemakers once made themselves. We've become so much more productive in our specialized roles in the workforce that we can't afford the time to make our own jerky. That is, we've become specialists at making things that aren't beef jerky. And that provides the opportunity for a whole new industry to thrive — the all-natural jerky specialist.

I can't see any of this as being inconsistent with the broad Becker framework. When parameters change, outcomes change.

Alas, New Zealand suffers here: high minimum wages and little recourse to illegal immigrants makes outsourcing of a lot of domestic services available only to folks much higher up the income ladder.

I wonder how much of New Zealand's lower productivity is due to the relative cost of these complementary inputs to high ability folks' labour. Shifting to capital instead doesn't much help given the typical NZ price shock: The Roomba 530 sells for $500 NZ = $420 US; Buy.com has it for $290. Dry cleaning is unbelievably expensive relative to the States.

I suppose there's fodder for a future honours project: compare household time use surveys for professionals in the US and NZ to see how much household production wastes Kiwis' time, figure out how much of it is substitution away from labour and how much is forgone leisure, and quantify the loss in GDP relative to a world in which Kiwi professionals had access to comparably priced complementary labour or capital substitutes for household production.

Here's Becker's Treatise. Or, what bits of it are available from Google Books.