A time-hierarchical microeconomic model of activities
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The microeconomic approach to explain consumers’ behavior regarding the choice of activities, consumption of goods and use of time is extended in this paper by explicitly including the temporal dimension in the choice-making process. Recognizing that some activities, such as a job and education, involve a long-term commitment and that other activities, such as leisure and shopping, are conducted and modified in the short term, we make these differences explicit in a microeconomic framework. Thus, a hierarchical temporal structure defines the time window or frequency of adjusting the variables of activities (duration, location and consumption of goods) and the magnitude of the resources (time and money) spent. We specify and analyze a stylized microeconomic model with two time scales, the macro and micro level, concluding that preference observations at the micro level, such as transport mode choice, are strongly conditioned by the prevailing choices at the macro scale. This result has strong implications for the current theory of the value and allocation of time, as well as on the location of activities, as illustrated by numerical example.
KeywordsValue of time Hierarchical decisions Temporal scale Long-term and short-term activities
This research was supported by the Risk Habitat Megacities’ Project from the Helmholz Society (Germany), the Millennium Institute on Complex Engineering Systems (ICM: P-05-004F, CONICYT: FBO16) and Fondecyt projects 1110124 and 1100239.
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