The Diseconomies of Do-it-Yourself

13 Pages Posted: 17 Mar 2016

See all articles by Ryan Murphy

Ryan Murphy

Southern Methodist University (SMU)

Date Written: March 15, 2016

Abstract

I argue that, due to mistrust of markets, households engage in excessive household production and too little market exchange, primarily due to anti-market bias. “Do-It-Yourself,” commonly engaged in for the purposes of prudence, contradicts the concept of comparative advantage under the conditions of perfect markets. Imperfections in real-life markets are insufficient as an explanation for the ubiquity of household production that could plausibly be purchased in markets. The optimality conditions set forth by Becker (1965) are unlikely to hold.

Keywords: Do-It-Yourself, Behavioral Economics, Social Economics, Rational Irrationality

JEL Classification: Z10, D13

Suggested Citation

Murphy, Ryan, The Diseconomies of Do-it-Yourself (March 15, 2016). Available at SSRN: https://ssrn.com/abstract=2748188 or http://dx.doi.org/10.2139/ssrn.2748188

Ryan Murphy (Contact Author)

Southern Methodist University (SMU) ( email )

6212 Bishop Blvd.
Dallas, TX 75275
United States

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