Measurement of Income with Time Use with Applications to Hedonic Indicators of Happiness and Misery
AbstractThe present paper examines several issues involved in expanding national economic accounts and quantitative social indicators to include the "consumption" of time. The first part examines this question in the context of the standard national economic accounts. It derives equilibrium conditions for consumer behavior with market and non-market consumption along with intrinsic values of time in different activities. Using a standard index-number approach, it shows that the growth of real income can be approximated by a weighted average of productivity growth rates in market and non-market productivity and that the valuation of hours drops out of the formula. The second part of the paper examines the role of quantitative social indicators using the approach of hedonic psychology to value time in different activities. It concludes that hedonic measures do not meet the standards for a interpersonally cardinal variable that are required to construct a meaningful quantitative social indicator.
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Bibliographic InfoPaper provided by Cowles Foundation for Research in Economics, Yale University in its series Cowles Foundation Discussion Papers with number 1705.
Length: 24 pages
Date of creation: Jun 2009
Date of revision:
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Postal: Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
Find related papers by JEL classification:
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- D1 - Microeconomics - - Household Behavior
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
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