We document a change in household shopping behavior during the Great Recession. Households purchased more on sale, larger sizes and generic products, increased coupon usage, and shopping at discount stores. We estimate that the returns to these shopping activities declined during the recession and therefore this behavior implies a signiﬁcant decrease in households’ opportunity cost of time. Using the estimated cost of time and time use data, we estimate a high elasticity of substitution between market expenditure and time spent on non-market work. We ﬁnd that households smooth a sizable fraction of consumption by varying their time allocation during recessions.
Nevo, A., & Wong, A. (2015). The Elasticity of Substitution Between Time and Market Goods: Evidence from the Great Recession. National Bureau of Economic Research (NBER). https://doi.org/10.3386/w21318