The value of time: a theoretical review

Abstract

We review the main models postulated to study the subjective value of non‐working time emphasizing the most important aspects behind the microeconomic formulation of time allocation models: among others we consider the behavioural assumptions, the role of constraints in the maximization process implicit in this task, and the relevant variables in the utility function. We analyse first the pioneering models of Becker (1965), De Serpa (1971, 1973) and Evans (1972), who develop a general theoretical framework which may be applied to modal choice models. We then go on to consider Train and McFadden's model (1978) where the formulation incorporates the theory of random utility in order to analyse the choice of individual transport services. This analysis is further developed in Bates and Roberts (1986), Jara‐Díaz and Farah (1987), and Jara‐Díaz et al. (1988), who extend and perfect the analysis to establish what may be considered as the actual position of research on the subject, and to which the most recent contributions of Jara‐Diaz (1994) are to be added.