Simultaneous modeling of individuals’ duration and expenditure decisions in out-of-home leisure activities

In this paper, we propose an activity model under time and budget constraints to simultaneously predict the allocation of time and money to out-of-home leisure activities. The proposed model is derived from well-established utility-based economic theories of resource allocation. The proposed framework considers the activity episode level, given the activity is scheduled. Thus, the model considers the decision of the quantities for duration and expenditure spent during the activity. We use a flexible utility function and show how the simultaneous equations can be estimated by using structural equations model (SEM) estimation techniques. The estimation results are based on a large national continuous leisure diary data set collected in 2008 in the Netherlands, which provides detailed information about time and money spent as well as timing and location attributes at the activity episode level. The analysis reveals that socio-demographics, travel party, timing and location variables influence the duration of activity episodes and associated expenditure. The analysis provides plausible and intuitive results and the log likelihood of the model shows that the model has significant explanatory value. Moreover, the endogeneity problem is solved in the estimation. The paper concludes with a discussion of implications of findings.