Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/252084 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 9567
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
People's value for their own time is a key input in evaluating public policies: evaluations should account for time taken away from work or leisure as a result of policy. Using rich choice data collected from farming households in western Kenya, we show that households exhibit non-transitive preferences consistent with behavioral features such as loss aversion and self-serving bias. As a result, neither market wages nor standard valuation techniques (such as the Becker-DeGroot-Marschak—BDM—mechanism of Becker et al., 1964) correctly measure participants' value of time. Using a structural model, we identify the mix of behavioral features driving our choice data. We find that these features distort choices when exchanging cash either for time or for goods. Our model estimates suggest that valuing the time of the self-employed at 60% of the market wage is a reasonable rule of thumb.
Subjects: 
value of time
non-transitivity
labor rationing
loss aversion
self-serving bias
JEL: 
C93
D03
D61
D91
J22
O12
Q12
Document Type: 
Working Paper
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