The Elasticity of Substitution Between Time and Market Goods: Evidence from the Great Recession

Aviv Nevo and Arlene Wong

No 21318, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We document a change in household shopping behavior during the Great Recession. Households purchased more on sale, larger sizes and generic products, increased coupon usage, and shopping at discount stores. We estimate that the returns to these shopping activities declined during the recession and therefore this behavior implies a significant decrease in households’ opportunity cost of time. Using the estimated cost of time and time use data, we estimate a high elasticity of substitution between market expenditure and time spent on non-market work. We find that households smooth a sizable fraction of consumption by varying their time allocation during recessions.

JEL-codes: D12 E31 J22 (search for similar items in EconPapers)
Date: 2015-07
New Economics Papers: this item is included in nep-lma and nep-mac
Note: EFG IO ME
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Citations: View citations in EconPapers (47)

Published as Aviv Nevo & Arlene Wong, 2019. "THE ELASTICITY OF SUBSTITUTION BETWEEN TIME AND MARKET GOODS: EVIDENCE FROM THE GREAT RECESSION," International Economic Review, vol 60(1), pages 25-51.

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Related works:
Journal Article: THE ELASTICITY OF SUBSTITUTION BETWEEN TIME AND MARKET GOODS: EVIDENCE FROM THE GREAT RECESSION (2019)
Working Paper: The Elasticity of Substitution Between Time and Market Goods: Evidence from the Great Recession (2014)
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