Calculating the Complex: Household services valuations

household servicesThe core question an economic expert tries to answer when performing an analysis of alleged damages is ‘what would it take to make the plaintiff whole?’ This often involves an investigation into lost earnings, but a person’s valuable and measurable labor does not just occur while at work. In cases involving injury or death, an analysis of potential damages may include household services. And this isn’t something that is only relevant to ‘stay-at-home moms’.

Household services account for the value of services an injured or deceased person would have provided family members had the injury or death not occurred. Tasks that are relevant in an analysis of lost household services may include caring for children, managing finances, maintaining a home and vehicles, running errands, etc. Calculating lost household services includes estimating the replacement cost of labor for the household if they were to hire a person to perform the tasks no longer provided due to death or injury.

But the picture of household services becomes increasingly complex when you consider the many directions that household services flow in your own home. Each member of the family may provide others with different household services, and each person is the recipient of the services of others. An economist will consider all of these factors in his or her analysis.

Two critical resources for calculating household services are The Dollar Value of a Day and the American Time Use Survey. These are often utilized by economic experts to firstly estimate the amount of time the injured or deceased person would have been expected to perform, and secondly calculate the cost of replacing those services.

The Dollar Value of a Day combines data from 2003 to 2013 and provides daily valuation of activities for 200 demographic groupings in the US. The Bureau of Labor Statistics makes the American Time Use Survey available to the public, as well as a helpful user’s guide. This survey provides measurements of the amount of time people spend performing activities including employment, household work, socializing and volunteering.

Relevant resources:

American Time Use Survey 2013 results – Use Survey News Release from the Bureau of Labor Statistics

The Valuation of Household Services – Conceptual Issues‘ and ‘Notable Judgements in the Valuation of Household Services‘ by Therese Brown from Economica

Household services table methodology‘ in Economic Damage Primer for Attorneys by Dwight Steward, Ph.D.