We use scanner data and time diaries to document how households substitute time for money through shopping and home production. We document substantial hetero-geneity in prices paid for identical goods for the same area and time, with older households shopping the most and paying the lowest prices. Doubling shopping frequency lowers a good's price by 7 to 10 percent. We estimate the shopper's price of time and use this series to estimate an elasticity of substitution between time and goods in home production of roughly 1.8. The observed life-cycle time allocation implies a consumption series that differs markedly from expenditures.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics