INCORPORATING DIFFERENCES IN MARGINAL UTILITIES OF TIME ACROSS ACTIVITIES IN A TIME ALLOCATION MODEL

Abstract

Most existing activity time allocation models assume that individuals allocate their time to different activities over a period in such a way that the marginal utilities of time across activities are equal. Their argument is that, if not equal, an individual is free to allocate more time to those activities whose marginal utilities of time are higher and, finally allocates the optimal time to each activity with equal marginal utility. However, such an ideal situation may not always prevail in reality, especially when an individual is under income constraint and/or under intense time pressure. In order to incorporate such differences in marginal utilities of time across activities, we enrich the traditional activity time allocation model by explicitly including income constraint and by adding marginal extension activity choice model. As an application, the developed integrated model is used to estimate the value of activity time during weekends in Tokyo. The results are encouraging in that they forecast the individual time allocation more accurately and estimate realistically the value of activity time for each activity in a set of different activities than do by existing traditional models.