Unpacking the Household: Informal Property Rights Around the Hearth
103 Pages Posted: 10 Jun 2006 Last revised: 14 Nov 2011
As Aristotle recognized in THE POLITICS, the household is an indispensable building block of social, economic, and political life. A liberal society grants its citizens far wider berth to arrange their households than to choose their familial and marital relationships. Legal commentators, however, have devoted far more attention to the family and to marriage than to the household as such.
To unpack the household, this Article applies transaction cost economics and sociological theory to interactions among household participants. It explores questions such as the structure of ownership of dwelling units, the scope of household production, and the governance of activities around the hearth. Drawing on a wide variety of historical and statistical sources, the Article contrasts conventional family-based households with arrangements in, among others, medieval English castles, Benedictine monasteries, and Israeli kibbutzim.
Most households involve several participants and as many as three distinct relationships - that among occupants, that among owners, and that between these two groups (the landlord-tenant relationship). Individuals, when structuring these home relationships, typically pursue a strategy of consorting with intimates. This facilitates informal coordination and greatly reduces the transaction costs of domestic interactions. Utopian critics, however, have sought to enlarge the scale of households, and some legal advocates have urged household members to write formal contracts and take disputes into court. These commentators fail to appreciate the great advantages, in the home setting, of informally associating with a few trustworthy intimates.
Keywords: Household, family, homeownership, landlord, co-ownership, social norms, theory of the firm, intentional community, housing
JEL Classification: J12, K11, K12, O17, R20, Z13
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