Household Services Methodology

By Christopher Skerritt, M.Ed., MBA, Chief of Economic Services · Published · Reviewed

Household services are the unpaid work a person performs for the household: cooking, cleaning, shopping, home and yard maintenance, household management, transportation, and care of children or other family members. The economist measures the hours the person can no longer perform, or that a decedent would have performed, and values them at the cost of replacing that work with paid labor in the local market.

When it is used

Household services are claimed in personal injury matters when an injury reduces the person's capacity for household work, and in wrongful death matters for the services the decedent would have provided to the surviving household. The household services valuation is often the largest component when the person was a full-time homemaker or a caregiver.

Step-by-step

  1. Establish the person's pre-event hours by task from the household's own account, corroborated by time-use survey data for people of the same sex, age, employment status, and household composition
  2. Determine the post-event capacity for each task from the medical and functional evidence, and compute the lost hours as the difference
  3. Select replacement wage rates for each task category from occupational wage data for the area where the household lives, such as cooks, housekeepers, childcare workers, and grounds maintenance workers
  4. Adjust the projection for changes in the household over time, such as children reaching adulthood, and for the age-related decline in hours reflected in the time-use data
  5. Carry the annual value forward over the appropriate horizon and reduce it to present value with the rest of the loss

Data sources

Limitations

Time-use data describe averages for demographic groups; a household in which one person did far more or far less than average must be documented from the record. Replacement cost values the work at what it would cost to hire it out, which is the standard approach but not the only one, and the report should identify the approach used. Care of a family member with special needs can exceed anything the survey captures and is documented separately.

Admissibility

Replacement cost valuation of household services using time-use and occupational wage data is the mainstream approach in the forensic economics literature and is regularly admitted. Contested points are the hours assumed, whether the person actually performed the tasks before the event, and whether the horizon is life expectancy or a shorter period. The household services guide describes the records that support each input.

Frequently Asked Questions

Is the household services loss measured by what the household actually paid for help?

The measure is replacement cost rather than out-of-pocket cost: the lost hours in each task category are multiplied by the local wage of the occupation that would perform that task, whether or not anyone was hired. Where help was hired, the invoices enter the analysis as evidence of the hours and the rate, not as the measure itself.

How does the time-use data treat a person who was employed full time?

The time-use tables report hours separately by employment status, so the projection for an employed person starts from the hours reported for employed people of the same sex and age, which run below the figures for people outside the labor force but rarely reach zero. The household's own account then corroborates or adjusts the table figure task by task.

How does the analysis treat a partial loss of capacity?

By task. A person may still cook but no longer be able to do yard work or lift a child. The lost hours are computed for each task category from the functional evidence, so the total reflects what the person actually can and cannot do.

Services that use this method

References

Request a consultation on Household Services Methodology or call (201) 343-0700. Plaintiff and defense counsel.