Why People with the Highest Hourly Opportunity CostAllocate as Much Time to Leisure as Everyone Else

Studies consistently reveal that people who earn the highesthourly incomes allocate about as much time each weekto leisure as do people who earn lower hourly incomes.How can this finding be true, given that the opportunitycost of hours devoted to leisurethat is, forgone incomeearningsis so much greater than that incurred by peoplewho earn lower hourly incomes?

Behavioural research indicates that those who earn thehighest incomes engage in particularly "active" forms ofleisure,such as exercising and volunteering to spend time oncharity projects. In contrast, people who earn lower incomestend to allocate leisure time to more "passive" types ofleisure,such as watching television or relaxing. Consistentwith such evidence, behavioural economists have foundthat people derive more enjoyment from active forms ofleisurethan from passive leisure pursuits. Available evidenceindicates that the highest-income individuals engage inhigher-quality activities during the time they allocate toleisure.Thus, people who earn the highest incomes devoteas much time to leisure because their leisure activities yieldgreater levels of enjoyment.

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