Please use this identifier to cite or link to this item: http://hdl.handle.net/1946/20251
This paper examines empirically the demand for sleep, with special attention given to its price, or more specifically its opportunity cost represented by wages. This is done using continuously gathered data from the American Time Use Survey. To gauge the causal direction of the relationship, exogenous variation in labor-market conditions were of interest. Thus variation in the unemployment rate by State is also used to investigate the cyclical nature of sleep duration. The models in the analysis are estimated using State fixed effects. Furthermore, the models are estimated separately for males and females and separately for those receiving a salary or hourly wages. The results reveal an inverse relationship between sleep duration and wages. This is in accordance with sleep duration being an economic choice variable rather than a predetermined subtraction of the 24-hour day. Although this inverse relationship is not significant in all the estimations for subjects who receive a fixed salary, it is constant and strong among subjects who receive hourly wages. This translates into elasticity measures of -0.01261 for those who receive hourly wages and -0.00678 for those who receive a fixed salary. A positive, strong and significant relationship between sleep duration and usual hours of work per week is also detected. Somewhat surprisingly, however, no relationship was detected between sleep duration and the business cycle.
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