Household production reduces income inequality, reshaping economic distribution.
Households with less money income tend to do more work at home, which can make income inequality seem less severe than it actually is. When we consider the value of household production along with money income, inequality appears to decrease. However, this decrease is mainly because we add a fixed amount - the average value of household production - to money income. This finding holds true even when we make different assumptions about the value of household production.