Valuation of leisure time of non-work days: Comparative discrete-continuous analysis

Abstract

This paper estimates empirically the value of leisure time of weekend non-work days by a resource allocation model. After pointing out a technical problem in estimating a resource allocation model with an additive separable utility function, we develop a discrete-continuous model in the context of individual’s time and cost allocation to two types of discretionary activities, out-of-home leisure activity and in-home leisure activity. We apply it to two individual activity diary surveys collected in the cities of Tokyo, Japan and Karlsruhe, Germany. We empirically valuate the values of leisure time of two cities based on the estimated parameters. The results show that the value of out-of-home leisure time is nearly equal to the wage rate in both cities while the value in-home leisure time is about 84 % in Tokyo and 45 % in Karlsruhe of the wage rate respectively.