Markets For Leisure Time

Citation:

Justin L. Voss and Roger D. Blackwell (1975) ,"Markets For Leisure Time", in NA - Advances in Consumer Research Volume 02, eds. Mary Jane Schlinger, Ann Abor, MI : Association for Consumer Research, Pages: 837-846.

Advances in Consumer Research Volume 2, 1975      Pages 837-846

MARKETS FOR LEISURE TIME

Justin L. Voss, State University of New York at Plattsburgh

Roger D. Blackwell, The Ohio State University

[Justin Voss is Assistant Professor of Economics and Environmental Science at State University of New York at Plattsburgh.]

[Roger D. Blackwell is Professor of Marketing, The Ohio State University and Vice-President, Management Horizons, Inc.]

The authors examine the nature of consumers' resources and indicate how a redefinition of the time constraint provides theoretical insights into the consumer's market for leisure time. This paper indicated the emergence of a second market for leisure time. Historically, economists have identified the market for leisure time with a reduction in working hours. This practice evolved from mercantilist England, where workers could freely vary their hours of labor. In a modern economy, however, where leisure is no longer equated with nonwork time, most consumers can buy time goods--goods and services which produce leisure time. Time goods constitute a second market for leisure time--a market analytically equivalent to a reduction in working hours. This paper suggests that this second market for leisure time represents a profitable opportunity for marketing strategies and a promising area for analytical and empirical research.

TIME AND MONEY BUDGETS

The affluence of recent decades has led some consumer analysts and economists to reconsider the economic constraints on individual consumption. One result of this research has been the growing recognition that consumer resources consist of two budget constraints--a money budget and a time budget. Since most commodities require spending time as well as money, in a high-consumption economy scarcity of time becomes an increasingly important problem--possibly the major factor limiting many affluent consumers' economic freedom.

In spite of the importance of the problem of time-scarcity, current economic literature has progressed little beyond the stage of formulating an economic model which includes time and money as multiple budget constraints (Voss, 1964; Becker, 1965; Johnson, 1966; Linder, 1970). Little of this literature has given relevant business application. The literature of consumer research has been more adventuresome but less precise (Engel, Kollat, Blackwell, 1973, op. 104-106). With some recent exceptions (Schary, 1971; Foote, 1966), market literature has treated lightly the analytical impact of time resources on consumer behavior. Adding a time dimension to consumer behavior, however, greatly affects consumer behavior and future consumption markets. Indeed, if consumer researchers are to penetrate the questions of time scarcity and respond effectively, they must develop perspectives on the scope and dimension of a problem that underlies many of the comPlexities of consumer behavior.

Since consumption of most goods and services requires spending time (which includes nearly all the leisure industry), in the future the issue facing both marketer and consumer will be much the same--one of discovering ways to augment individual time budgets so that consumption of preferred goods and services can be expanded and optimizing consumption patterns achieved. In a sense the future of consumer welfare depends to a considerable extent on the answer to one critical question. How can consumers obtain more time? Or more specifically for consumer research, how and where can consumers buy more time.? The answer necessitates a thoroughgoing knowledge of the "The Market for Time."

Unfortunately, the literature of economics and consumer behavior has given little analytical recognition to the concept of a market for time, per se. Every day, however, consumers are buying discretionary or leisure time. Where is this market? What prices are being paid? What quantities a;e being purchased.? How efficient are the marketing institutions involved in these transactions? These questions must at least be raised and tentative answers given if consumer research is to meet the needs of future markets.

MARKETS FOR TIME

A clear conception of time prices and of leisure are essential to an analytical treatment of each of these concepts in consumer research.

Nature of the Time Constraint

In the conceptualization of many current authors, leisure is defined as:

L = T - W

where

L = Leisure

T = Total time available

W = Work

By adopting the above conceptualization in the contemporary work-leisure model rather than a more sophisticated conceptualization, many insights into consumer behavior have been eliminated.

In this paper a more extended conceptualization of leisure is adopted. This conceptualization provides the basis for a more in-depth understanding of leisure-spending patterns and one that is more in accord with the consumer market behavior. The following conceptualization is used in this paper:

L = T - (N + W)

where

L = Leisure

T = Total time

N = Nondiscretionary time

W = Work

Consumer research has quantified qualitative differences between distinct periods of time, which correspond to the division of nonwork time into nondiscretionary time and leisure. One researcher (Foote, 1966) has identified what he terms "special" activities as distinguished from "routine" activities. Significantly different preference ratings exist between the different activities and Foote indicates that whereas most activities are considered "routine", "special" activities tend to be concentrated on weekends. This clustering of "special" or leisure time activities corresponds to the increased availability of time on weekends. A more thorough discussion of this definition of leisure and alternative conceptualizations of leisure is available in an earlier paper (Voss, 1964; 1967).

ANALYTICAL MODELS OF TIME AND LEISURE -- A SECOND MARKET FOR TIME

Since the mid-1960s, a number of economists and consumer researchers have found weaknesses in contemporary explanations of the consumer's work-leisure behavior. Their arguments center on grounds other than the traditional arguments of imperfect markets or standard work weeks. For some reason, not readily apparent, these widely recognized arguments or criticisms of the contemporary model have not been included by modern critics. Certainly, it would have made their case stronger. In fact, Becker's alternative model is based on the foregone earnings concept and its corollary assumption of flexibility (Becker, 1965). These writers suggest, implicitly or explicitly, the need for a revision of the contemporary explanation for consumers' work-leisure behavior, even though they differ both as to why a reconstruction is necessary and the nature of the model.

They argue that a fundamental aspect of consumer behavior has been neglected. Namely, consumers spend from two resources: a time budget and a money budget. (Voss, 1964; Becker, 1965; Johnson, 1966; Linder, 1970; Schary, 1971).

The First Market for Time

In a contemporary model of consumer time behavior, leisure time, L, is defined as equal to total time available, T, minus work time, W. By definition, work and leisure are linked analytically. Ergo, leisure time is purchased only by reducing working hours. The price of leisure time is measured by foregone earnings. Proponents of this contemporary model argue that leisure as a consumer good differs only in the way it has to be bought. One gives up income, but it is done by working fewer hours at remunerative employment. The exchange of money for a good is still there by the way the transfer is accomplished (Brennan, 1965, D . 293).

Adopting a T-W definition of leisure time has distinct analytic advantages. It enables one model to explain both the demand for leisure time and the individual supply curve for labor. This dichotomization evolved from the classical work-leisure model where work was defined as pain, and leisure was defined as freedom from pain. The only way the individual could buy leisure (freedom from pain of labor) was to work less. Increasing leisure was tied by analytic necessity to decreasing working hours. Although historical working conditions have changed greatly, the contemporary work-leisure model adopts the T-W definition of leisure time along with its analytical corollaries--the model's duality and its specification of one market for time. Identifying and accepting changes in working hours as a market for time, however, is quite a different thing from accepting it as the market for time.

The Second Market for Time

The position of the present paper is that the contemporary work-leisure model is deficient on definitional grounds. Since it is generally understood that when workers demand leisure time they are demanding the luxury of discretionary or "own" use of the time resource, it is apparent empirically that all nonwork time is not leisure. As Foote has demonstrated, consumers are willing to pay a price to reduce time expenditures on certain items in their activity set (Foote, 1966). Consequently, the contemporary model's definition of leisure, L = T - W, does not adequately characterize the leisure variable. All nonwork time simply is not leisure. This empirical observation has not been explained analytically in the context of the work-leisure model. When leisure is defined with greater empirical accuracy as L = T - (N + W), it provides a more satisfactory explanation of consumer behavior and introduces the possibility of more than one market for time.

Once the dichotomization of work and leisure has been invalidated, there follow important analytical implications. If, after redefining leisure, the concept of foregone earnings is broadened to foregone income, then one may argue that income may be exchanged for leisure time directly, in the same manner that other commodities are exchanged without affecting working hours. L may be increased by reducing N while W remains unchanged. These nonwork reducing, leisure-time producing expenditures constitute a second market for time. Analytically, such consumer expenditures augment leisure time in the same sense as a reduction in working hours. These leisure time producing goods and services have been identified previously as time goods (Voss, 1967).

Moreover, when there are ways to buy leisure time other than through reducing working hours, the duality property of the contemporary work-leisure model is nullified. Indeed, while the demands for leisure clearly continue to provide a necessary and sufficient explanation for the individual's supply curve for labor in a modern economy, the reverse is not longer the case. A separate model is required to explain the demand for leisure time. The substitute relationship between work and leisure specified definitionally by the contemporary work-leisure model is replaced by a model capable of explaining both substitute and complementary relationships.

This second market for leisure time may be identified empirically. As early as 1932, at least one writer had identified this potential market and distinguished time-saving from labor-saving expenditures (Pitkin, 1932, pp. 231-232). Moreover, for centuries, domestic servants had served as a leisure-producing function even though their services were limited to a small segment of the consuming public.

Armed with the knowledge that consumers do, in fact, demand additional time to use at their own discretion, even the most casual observation of the present-day economic environment would reveal that consumers buy leisure, or "own" time, through the purchasing of goods and services with nondiscretionary time-saving, hence, leisure time augmenting characteristics.

From a marketing perspective, the reconstructed work-leisure model presented in this paper offers insight into the value of products. Servants have been apparently replaced by self-cleaning ovens, microwave ovens, and instant cake mix. While these products are frequently described as labor-saving devices, the perspective suggested here is that they are also (and possibly more importantly) time-saving devices. Not only does the model suggest the necessity to view consumer durables (such as microwave ovens) as leisure-time producing devices and consumer nondurables (such as fast foods) as leisure-time producing goods, but it also focuses attention upon the entire service industry as part of the second market for time.

In addition to the obvious research potentials of establishing the time prices for goods and services that consumers will be willing to pay in the second market for time, an additional perspective is suggested. The existence of a second market for time means that an individual can add assets without giving up income. The individual still has his income but the question is one of how it is spent. If the consumer acts through the traditional market for time (first market for time), incomes are reduced because of reductions in working hours, but if the consumer purchases leisure in the second market for time, he retains more options.

Prices in Markets for Time

Two markets-for time exist for consumers for which prices exist. The price of the first market for time, which is defined to be reduction of work, is equated to foregone income. The price of time in the second market is foregone spending on nonleisure producing goods and services. Both cases involve a trade-off between money and time. In each market, money is exchanged for additional leisure time, hence time prices in each market are analytically equivalent. Which market the consumer enters is largely dependent upon the ease of market entry, that is the operational nature of the market.

The operational nature of the first market (reduction in workweek) is relatively inflexible for individual consumers. The operational nature of the second market (reduction of spending on nonleisure producing goods and services) is whether in fact consumers are aware of the actual prices of time and how much leisure time in fact will be saved. Since in each market, money is exchanged for additional leisure time, which market the consumer enters is primarily determined by the ease of market entry, i.e. the operational nature of the market. and the Price Per unit of leisure time in each market.

RESOURCE VALUE INVERSION

The rapid spread of discretionary incomes to the masses of consumers in the industrialized economies has a profound effect upon the effectiveness of marketing strategies for time-leisure goods. The phenomenon has created what may be termed a resource value inversion which has important consequences for the development of marketing strategies.

Engulfed by the tidal wave of spending in the postwar period, business strategists have apparently neglected the fundamental aspect of consumer behavior described in the preceding pages. Namely, consumers spend from two resource budgets: a time budget and a money budget.

The fact that the importance of the time budget and the money budget may vary between consumers is called the Principle of Resource Value Inversion. Specifically, when consumers' incomes rise (as they have in recent decades), time ascends the value scale relative to money. As incomes grow, consumers place more value on their time budgets. This principle is of importance most obviously as an influence on product design and its effect on shopping patterns. It may also have considerable influence on the messages that should be used in the communications program.

Why does Resource Value Inversion (RVI) occur and how does it affect marketing strategies? One obvious reason for RVI is that on most commodities consumers must spend time as well as money. Rising incomes and more spending means that consumers must also have more time if they are to have the goods and services they prefer. RVI may also result from changing consumption patterns. Consumers may prefer proportionately more purchases that require spending larger amounts of time. The dramatic growth of the leisure industry is evidence that Americans are changing the valuation they place on resources.

Demand factors alone, however, cannot account for the Resource Value Inversion that has occurred since World War II. Business itself has contributed greatly to RVI. Since consumers traditionally have augmented time budgets by reducing working hours (First Market for Time), employers are primary suppliers of leisure. In this century workers have taken two-thirds of their productivity gains in the form of added income and one-third as added leisure.

Regaining leisure hours from employers for most workers has become increasingly difficult as the process has become institutionalized and inflexible. Consequently, workers as consumers find it harder and harder to augment leisure time as incomes have risen. Contrary to popular belief, in the postwar period consumers have not been swamped with leisure time. In fact, just the opposite has occurred: While money budgets have grown rapidly, the flow of leisure hours has slowed to a trickle.

If attention is focused upon how consumers have increased their time budgets over the past century, two trends are apparent. First, leisure gains during the sixties were small. In the decade of the sixties, reductions in working hours added only 50 hours a year to leisure time budgets compared to the century's average of 80 hours per year. It is estimated that only about 8 per cent of productivity gains during the sixties went to augment time budgets; the remaining 92 per cent went to money budgets (Moore & Hedges, 1971).

Second, the form in which leisure gains are taken has changed significantly. Whereas most of the leisure gains in the past century have been in the form of a shorter workweek (85 per cent of them), since 1950 the average workweek has remained relatively constant (Moore & Hedges, 1971). (The small declines in "average" workweek that have sometimes been reported reflect an increasing proportion of part-time workers and a decreasing proportion of farm-workers. Scheduled hours for full-time workers showed little change, averaging 45 hours in 1970.). Rather than reductions in the workweek, adding leisure time in "blocks" (paid vacations and holidays) is increasing much more rapidly than in past decades. Leisure gains since World War Ii can perhaps best be characterized by the statement: "Consumers Play with Blocks" -- blocks of leisure time, that is.

There is little doubt that Resource Value Inversion is a byproduct of our modern affluent economy, but what precisely does it mean for marketing strategies? By analyzing both the First and the Second market for time, several conclusions emerge. Although many other effects are possible, some of the implications include the following:

1. A growing importance for goods and services that economize on the consumers' use of time.

2. A growing importance of goods and services that require spending leisure time in "blocks".

3. A decline in the effectiveness of monetary incentives relative to leisure time incentives.

The above conclusions apply very broadly to consumer goods and services and to labor productivity as well. Referring specifically to leisure activities, there is some evidence that spending from the time budget is of more importance to consumers than spending from the money budget (Hawes, 1974; Voss, 1974 . The increasing demand for blocked time could well be met by various forms of the flexible workweek (4-day week, gliding time, etc.), by increased amounts of vacation time and 3-day weekend holidays, by sabbaticals and earlier retirements (Voss, 1971). If these blocked time options are taken by American consumer-workers, the implications for marketing will be as significant or more so than for the production function.

RESEARCH NEEDED ON THE MARKETS FOR TIME

A great deal of additional research is needed which would provide an in-depth investigation of concepts presented in this paper. Some of the more promising research needs are described below.

First, there needs to be quantitative identification of the markets for time with careful definition of the dimensions of time markets. Before questions of pricing policies, advertising effectiveness, market efficiency, and so forth can be analyzed from a time perspective, the market for time must be identified and its conceptual framework operationalized to a much greater extent.

Each division of the market for time has important implications for consumer research and for the business community as a whole. The market for time also has important implications for government agencies, however. As the dimensioning of this market is accomplished, it may become apparent that taxing policies may be influenced (since increases in income are taxed but increases in discretionary time are not).

Second, there needs to be a careful analysis of the relative attractiveness to consumers of the two time markets. Consumer surveys and experiments should investigate in which market consumers prefer to buy leisure time. An attempt should be made to assess why consumers tend to prefer one market over the other. In this context, the pricing mechanism in the two markets should be considered carefully to establish estimates of time prices.

Third, a comprehensive analysis needs to be completed defining the relationship between the second market for time and specific consumption markets. For example, the effects of time valuation should be assessed in relation to consumer durable goods, consumer nondurable goods, and service industries. While this may appear to be of most importance to the private sector. we would argue that it is of great significance to the public sector as well. Obviously, if time values are of such high magnitude that consumers are willing to purchase large quantities of disposable containers (such as in fast food industries), a significant refuse problem is created which must be solved by the government. It would be helpful to identify the probable effects upon such applications due to increasing affluence in the money budgets of consumers.

The provision of the services by the government is also an area directly affected by consumer markets for time. The government has the choice of providing highways that will speed consumers rapidly along their way or of not doing so. Also, the government can build bridges, airports, and other facilities that will save time but it must know the relative value of such facilities to the public (Voss, 1968).

Fourth, the facilities for leisure need to be better understood as a result of an improved model of consumer time expenditures. Perhaps, the only person affluent enough (in his time budget) to attend a baseball game as a person who is relatively poor (in his money budget). Similarly, if consumers are impoverished (in the time dimension) of their daily workweek budget they may only be able to afford the time involved in tennis and may be willing to pay large amounts from their money budget for that small amount of leisure time. At the same time, if budgets of "blocked" time are increasing substantially, preferences for time-intensive leisure activities (such as golf) may be increasing dramatically by the timing of blocked time (such as on holiday weekends, retirement, and so forth). The effect on leisure-time facilities is of such importance as to demand dramatically increased consideration both in the private sector and in the public sector of the economy.

CONCLUSIONS

The purpose of this paper is to demonstrate the need for a careful consideration of the role of time in the analysis of consumer behavior. A conceptual model is presented which emphasizes a redefinition of work-leisure model and focuses(instead) on leisure as discretionary time. Such an analysis leads to the conclusion that two markets for time exist. Not only can leisure be purchased by a reduction in the workweek (the first market for time) but leisure can also be purchased by the second market for time--goods and services which produce leisure time.

This analysis should be helpful in understanding the potential of new products and services and in the appeals that might be promoted concerning goods and services. In contrast to the first market for time, the second market for time has a number of appeals. In the first market for time, people simply work less to obtain more leisure. In the second market for time, however, people purchase more goods and services to provide more leisure. Thus, not only do they help themselves but they also contribute to increases in the Gross National Product at the same time.

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