Toward a Framework for Time Use, Welfare, and Household-Centric Economic Measurement

Abstract

What is meant by economic progress, and how should it be measured? The conventional answer is growth in real GDP over time or compared across countries, a monetary measure adjusted for the general rate of increase in prices. However, there is increasing interest in developing an alternative understanding of economic progress, particularly in the context of digitalization of the economy and the consequent significant changes Internet use is bringing about in production and household activity. This paper discusses one alternative approach, combining an extended utility framework considering time allocation over paid work, household work, leisure, and consumption with measures of objective or subjective well-being while engaging in different activities. Developing this wider economic welfare measure would require the collection of time use statistics as well as well-being data and direct survey evidence, such as the willingness to pay for leisure time. We advocate an experimental set of time and well-being accounts, with a particular focus on the digitally driven shifts in behavior.

Measuring Welfare Beyond GDP

“…In considering alternatives to GDP, Heys (2019) presented a spectrum of theoretical options at the ESCoE conference on Economic Measurement 2019 (EM 2019), as shown in figure 2, ranging from what he calls ‘GDP minus' to ‘Well-being’. On the left-hand side ‘GDP minus' refers to GDP consisting of purely market sector GDP, and ‘GDP’ refers to GDP as it is currently measured.…”

“…Payne and Vassilev (2019) presented work at EM 2019 on measuring time use, complementing work by Coyle and Nakamura (2019). The importance, and potential value in measuring time use as a measure of welfare is partly driven by the effects of digitisation and the significant changes that internet use is bringing about in production and household activity.…”

“…An alternative to measuring time use in different activities itself, is to measure well-being in the dimension of time, which is the focus of Coyle and Nakmura (2019). They discuss two approaches that could be combined to give a monetary or cardinal measure of welfare.…”

“…Another approach relies on subjective measures of well-being such as happiness, or the measure of ‘objective’ utility that Kahneman (1999) describes as being based on real-time estimates of pleasure and pain, as distinct from subjective measures that ask about the enjoyability of past events. Coyle and Nakamura (2019) suggest linking these two approaches as digitalisation of the economy transforms the time people are spending in different activities to which they attach different degrees of well-being.…”

Household Innovation, R&D, and New Measures of Intangible Capital

“…More generally,Coyle and Nakamura (2019) highlight needed steps to develop a framework for assessing the relationship between household time-use and social welfare. 10 For example, seeNakamura, Samuels, and Soloveichik (2017),Brynjolfsson and Oh (2012),Goolsbee and Klenow (2006),Brynjolfsson, Eggers, and Gannamaneni (2018), andDiewert and Fox (2017).…”