United States Department of Transportation
i
A latent class multiple constraint multiple discrete-continuous extreme value model of time use and goods consumption.
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2016-06-01
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Abstract:This paper develops a microeconomic theory-based multiple discrete continuous choice model that considers: (a) that both goods consumption and time allocations (to work and non-work activities) enter separately as decision variables in the utility function, (b) that both time and money budget constraints govern the activity participation and goods consumption decisions, (c) a finite probability of zero consumptions and zero time allocations (i.e., corner solutions), and (d) technical constraints in the form of minimum consumption levels for any good that is consumed and minimum time allocation for any activity conducted. The time allocation utility function includes time assigned to work also as a decision variable, along with time allocations to various non-work activities, to capture trade-offs between the generation of income for consuming goods and time allocation to non-work activities. The proposed model is applied in the form of a latent class market segmentation model (to consider heterogeneity) on a Dutch dataset to understand the determinants of weekly time use and goods consumption behavior. Comparison of the values of time implied by the proposed model with those from simpler models proposed earlier in the literature suggest that ignoring either corner solutions and minimum consumptions or ignoring goods consumption in time use models can potentially lead to overestimation of the values of leisure and work times.
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