Some estimates for income elasticities of leisure activities in the United States

González Chapela, Jorge (2014): Some estimates for income elasticities of leisure activities in the United States.

Abstract

The empirical classification of leisure activities into luxuries, necessities, or inferior activities is useful for predicting the impact of economic development or life-cycle variations in wages on the organization of people’s leisure. We take a step in that direction. We present theoretical underpinnings to the investigation of leisure-income responses and conduct an empirical examination of four broad activities using a recently collected cross-section of observations on time use in the US. Findings suggest that consumers endowed with more income opt to improve the quality of their leisure activities but not to increase (or increase only slightly) the time spent on them. A positive, direct effect of education on active leisure stemming mainly from men’s behavior is also found.

• Item Type: MPRA Paper
• Language: English
• Keywords: Engel aggregation; empirical time-demand functions; income elasticities of time use; American Time Use Survey.
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C26 - Instrumental Variables (IV) Estimation; D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J22 - Time Allocation and Labor Supply

References

Aguiar, Mark, and Erik Hurst. 2007. Measuring trends in leisure: The allocation of time over five decades. The Quarterly Journal of Economics 122(3):969-1006.

Becker, Gary S. 1965. A theory of the allocation of time. The Economic Journal 75:493-517.

Biddle, Jeff, and Daniel Hamermesh. 1990. Sleep and the allocation of time. Journal of Political Economy 98(5):922–943.

Blundell, Richard, and Thomas MaCurdy. 1999. Labor supply: a review of alternative approaches. In Handbook of Labor Economics, vol. 3, ed. Orley Ashenfelter and David Card. Amsterdam: Elsevier Science B. V.

Borjas, George J. 1999. The economic analysis of immigration. In Handbook of Labor Economics, vol. 3, ed. Orley Ashenfelter and David Card. Amsterdam: Elsevier Science B. V.

Dardis, Rachel, Horacio Soberon-Ferrer, and Dilip Patro. 1994. Analysis of leisure expenditures in the United States. Journal of Leisure Research 26(4): 309-321.

Greene, William H. 1981. On the asymptotic bias of the Ordinary Least Squares estimator of the Tobit model. Econometrica 49(2):505-513.

Greene, William H. 2003. Econometric Analysis, fifth edition. Pearson Education International.

Gronau, Reuben. 1976. The allocation of time of Israeli women. Journal of Political Economy 84(4):S201-S220.

Gronau, Reuben, and Daniel S. Hamermesh. 2006. Time vs. goods: The value of measuring household production technologies. Review of Income and Wealth 52(1):1-16.

Hamermesh, Daniel S., Harley Frazis, and Jay Stewart. 2005. Data watch. The American Time Use Survey. Journal of Economic Perspectives 19(1):221-232.

Juster, F. Thomas, Paul Courant, Greg J. Duncan, John P. Robinson, and Frank P. Stafford. 1978. Time use in economic and social accounts, 1975-1976. Manuscript. Interuniversity Consortium for Political and Social Research. Ann Arbor, Michigan.

Kenkel, Donald S. 1991. Health behavior, health knowledge, and schooling. Journal of Political Economy 99(2):287-305.

Kooreman, Peter, and Arie Kapteyn. 1987. A disaggregated analysis of the allocation of time within the household. Journal of Political Economy 95(2):223-249.

McDonald, John F., and Robert A. Moffitt. 1980. The uses of Tobit Analysis. The Review of Economics and Statistics 62(2): 318-321.

Mincer, Jacob. 1963. Market prices, opportunity costs, and income effects. In Measurement in Economics: Studies in Mathematical Economics and Econometrics in Memory of Yehuda Grunfeld, edited by C. Christ et al. Stanford, California: Stanford University Press.

Mullahy, John and Stephanie A. Robert. 2010. No time to lose: Time constraints and physical activity in the production of health. Review of Economics of the Household 4:409-432.

Owen, John D. 1971. The demand for leisure. Journal of Political Economy 79(1):56-76.

Papke, L.E. and J.M. Wooldridge. 1996. Econometric methods for fractional response variables with an application to 401 (K) plan participation rates. Journal of Applied Econometrics 11(6): 619-632.

Sargan, J.D. 1958. The estimation of economic relationships using instrumental variables. Econometrica 26:393-415.

Staiger, Douglas, and James H. Stock. 1997. Instrumental variables regression with weak instruments. Econometrica 65(3):557-586.

Stapleton, David C., and Douglas J. Young. 1984. Censored normal regression with measurement error on the dependent variable. Econometrica 52(3):737-760.

Stewart, Jay. 2013. Tobit or not Tobit? Journal of Economic and Social Measurement 38:263-290.

Stoker, Thomas M. 1986. Consistent estimation of scaled coefficients. Econometrica 54(6):1461-1481.

Wales, T.J., and A.D. Woodland. 1977. Estimation of the allocation of time for work, leisure, and housework. Econometrica 45(1):115-132.

Wooldridge, Jeffrey M. 2010. Econometric Analysis of Cross Section and Panel Data, second edition. Cambridge, MA: The MIT Press.