A study of the time allocation and full income of the Laguna households

Abstract

In investigating the interrelationship of time allocation and full income of the Laguna farmers, this study follows the theory of the New Household Economics. The theory treats time, the only common resource available to all individuals, as an economic resource. Time, due to its scarcity and high value, is recognized as the critical factor in analyzing economic behaviour. The efforts, or lack of them, of individuals could only be analyzed through time. The hypothesis implicitly being postulated in this study is that the more effort an individual makes, the greater his/her income is expected to be. Time not only is used as an accounting unit for full income computations but also is treated as a variable that explains income. An individual's income is defined in this study as the summation of the value of the different time classifications of an individual, i.e., market-production time, home-production time, and leisure. Full household income is nothing other than the total incomes of the various individual members plus non-labour income of the family. The source of data used in this study is a multi-purpose survey conducted in Laguna, Philippines, employing both a recall-record and an intensive direct-observation method. Least-squares theory regression analysis revealed that market time, home time, market wage rate, age and education of an individual are the variables that best explain his/her income. With respect to full household income, the important determinants were market wage rate, total expenditure, market time, age, net assets, education, family size and home time, in that order. The different behaviours of individuals, as reflected in their time use, are found to be influenced by their different attributes; that is, their ages, education/training, as well as market wage rates. Canonical correlation analysis was employed to find the inter-relationship between two sets of variables. It is concluded that the longer time an individual devotes for productive activities, the higher his/her income is. The time a person devotes for different activities is dictated by his/her needs, training, and other personal attributes. This is taken to mean that one's efforts determine to a very large degree his/her position in society, income-wise.