Simultaneous modeling of individuals’ duration and expenditure decisions in out-of-home leisure activities

Abstract

In this paper, we propose an activity model under time and budget constraints to simultaneously predict the allocation of time and money to out-of-home leisure activities. The proposed framework considers the activity episode level, given that the activity is scheduled. Thus, the model considers the decision of the quantities for duration and expenditure spent during the activity. We use a flexible utility function and show how the simultaneous equations can be estimated by using structural equations model (SEM) estimation techniques to handle the endogeneity problem of time and expenditure. The estimation results are based on a large national leisure diary data set collected in 2008 in the Netherlands, which provides detailed information about time and money spent as well as timing and location attributes of the activities. The analysis reveals that socio-demographics, travel party, timing and location variables influence the duration and expenditure of activity episodes. It shows that various socio-demographic groups display different preferences in terms of the time and money spent on activities. The results also indicate substitution relationships between spending more time and money for various activity categories. Thus it is concluded that the analysis provides useful results for a better understanding of combined time and money allocation decisions for leisure activities.