A Joint Model for the Perfect and Imperfect Substitute Goods Case: Application to Activity Time-Use Decisions

This paper formulates a model for the joint analysis of the imperfect and perfect substitute goods case. That is, it enables the modeling of choice situations where consumers choose multiple alternatives at the same time from a certain set of alternatives, but also choose only one alternative from among a subset of alternatives. For example, in the context of time-use in leisure activity, individuals may participate in combinations of social, out-of-home recreation, and out-of-home non-maintenance shopping pursuits. These three activity types are imperfect substitutes in that they serve different functional needs of individuals and households. However, if an individual participates in out-of-home recreation, s/he may participate in only one of physically passive activities (for example, going to the movies), partially physically active activities (going to the beach or participating in spectator sports), or physically active activities (for example, working out at a gym) during a given time period (such as a weekday or a weekend day). To our knowledge, this paper is the first to consider a unified utility-maximizing framework for the analysis of such a joint imperfect-perfect substitute goods case in the economic literature. The model formulated in the paper is applied to the time-use decisions of individuals. Specifically, individual time-use in maintenance and leisure activities are modeled as a function of demographic variables, urban environment attributes, and day of week/season effects. The results from the model can be used to examine time use choices across different segments of the population (for example, male vs. female, young vs. old, etc.), as well as to assess the potential impact of urban form policies on individual time use decisions.