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Short Run Constraints and the Increasing Marginal Value of Time in Recreation

  • Raymond B. Palmquist
  • Daniel J. Phaneuf
  • V. Kerry Smith

Leisure activities such as local recreation trips usually take place in discrete blocks of time that are surrounded by time devoted to other commitments. It can be costly to transfer time between blocks to allow for longer outings. These observations affect the value of time within those blocks and suggest that traditional methods for valuing time using labor markets miss important considerations. This paper presents a new model for time valuation that uses non-employment time commitments to infer the shadow value of time spent in recreation. A unique survey that elicited revealed and stated preference data on household time allocation is used to implement the model. The results support the conclusion that there is an increasing marginal value of time for recreation as the trip length increases.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14986.

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Date of creation: May 2009
Date of revision:
Publication status: published as Raymond Palmquist & Daniel Phaneuf & V. Smith, 2010. "Short Run Constraints and the Increasing Marginal Value of Time in Recreation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 46(1), pages 19-41, May.
Handle: RePEc:nbr:nberwo:14986
Note: EEE
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  1. Feather, Peter & Shaw, W. Douglass, 1998. "Estimating The Cost Of Leisure Time For Recreation Demand Models," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20855, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  2. Frank J. Cesario, 1976. "Value of Time in Recreation Benefit Studies," Land Economics, University of Wisconsin Press, vol. 52(1), pages 32-41.
  3. DeSerpa, A C, 1971. "A Theory of the Economics of Time," Economic Journal, Royal Economic Society, vol. 81(324), pages 828-46, December.
  4. Harley Frazis & Jay Stewart, 2007. "Where Does the Time Go? Concepts and Measurement in the American Time Use Survey," NBER Chapters, in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 73-97 National Bureau of Economic Research, Inc.
  5. Nancy E. Bockstael & Ivar E. Strand & W. Michael Hanemann, 1987. "Time and the Recreational Demand Model," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(2), pages 293-302.
  6. Dale Jorgenson & J. Steven Landefeld & William D. Nordhaus, 2006. "A New Architecture for the U.S. National Accounts," NBER Books, National Bureau of Economic Research, Inc, number jorg06-1, December.
  7. V. Kerry Smith & William H. Desvousges & Matthew P. McGivney, 1983. "The Opportunity Cost of Travel Time in Recreation Demand Models," Land Economics, University of Wisconsin Press, vol. 59(3), pages 259-278.
  8. Robert E. Hall, 2009. "Reconciling Cyclical Movements in the Marginal Value of Time and the Marginal Product of Labor," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 281-323, 04.
  9. Douglas M. Larson & Sabina L. Shaikh, 2001. "Empirical Specification Requirements for Two-Constraint Models of Recreation Choice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 428-440.
  10. Raj Chetty & Adam Szeidl, 2006. "Consumption Commitments and Risk Preferences," NBER Working Papers 12467, National Bureau of Economic Research, Inc.
  11. Peter C. Reiss & Matthew W. White, 2006. "Evaluating Welfare with Nonlinear Prices," NBER Working Papers 12370, National Bureau of Economic Research, Inc.
  12. Lew, Daniel K. & Larson, Douglas M., 2005. "Accounting for stochastic shadow values of time in discrete-choice recreation demand models," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 341-361, September.
  13. Landefeld, J Steven & McCulla, Stephanie H, 2000. "Accounting for Nonmarket Household Production within a National Accounts Framework," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(3), pages 289-307, September.
  14. K. E. McConnell, 1999. "Household Labor Market Choices and the Demand for Recreation," Land Economics, University of Wisconsin Press, vol. 75(3), pages 466-477.
  15. University of Iowa & Galina Vereshchagina, 2007. "Preferences for risk in a dynamic model with consumption commitments," 2007 Meeting Papers 567, Society for Economic Dynamics.
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