Time Allocation, Experiential Well‐Being, and Income: Happier Time for the Richer?

Do richer individuals allocate their time to activities that result in higher levels of happiness? Do people experience different levels of happiness for the same activities based on their income levels? This study offers a comprehensive examination of these questions, drawing from the American Time Use Survey (ATUS). Our findings reveal that income shapes individuals' allocation of time, but “money does not buy happier time.” We find evidence that high‐income women and in general high‐income people during weekends and holidays tend to allocate more time in activities that lead to higher experiential well‐being. Yet, interestingly, we find that the subjective well‐being derived by rich people from the activities they perform more frequently is substantially lower than the one experienced by an average US resident when performing the same activities. Happiness associated with the use of time seems to be in the eyes of the beholder, as we find that subjective happiness differences between rich and poor are explained by different preferences over similar activities (time use preference channel) rather than a different allocation of time (activity‐composition channel).