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On the Effect of the Great Recession on US Household Expenditures for Entertainment

Author

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  • Liping Gao
  • Hyeongwoo Kim
  • Yaoqi Zhang

Abstract

This paper empirically investigates potential effects of economic recessions on consumers¡¯ decision making process for recreational activities using the Consumer Expenditure Survey (CES) data during the Great Recession. We employ the Probit model to study how changes in income affect the likelihood of making non-zero expenditures on entertainment activities. We also use the Tobit model to assess the income effect on those activities in the presence of censored observations. We found overall statistically significant effects of recessions on leisure activities, which may explain sluggish adjustments of leisure consumption during recessions.

Suggested Citation

  • Liping Gao & Hyeongwoo Kim & Yaoqi Zhang, 2013. "On the Effect of the Great Recession on US Household Expenditures for Entertainment," Auburn Economics Working Paper Series auwp2013-09, Department of Economics, Auburn University.
  • Handle: RePEc:abn:wpaper:auwp2013-09
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    File URL: http://cla.auburn.edu/econwp/Archives/2013/2013-09.pdf
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    References listed on IDEAS

    as
    1. Ateca-Amestoy, Victoria & Serrano-del-Rosal, Rafael & Vera-Toscano, Esperanza, 2008. "The leisure experience," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(1), pages 64-78, February.
    2. Jara-Díaz, Sergio R. & Munizaga, Marcela A. & Greeven, Paulina & Guerra, Reinaldo & Axhausen, Kay, 2008. "Estimating the value of leisure from a time allocation model," Transportation Research Part B: Methodological, Elsevier, vol. 42(10), pages 946-957, December.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Entertainment; Consumer Expenditure Survey; Probit Model; Tobit Model;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • P46 - Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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