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Income for information - Measuring the Value of Time

Development Challenge

That individuals have limited time, and that it serves as a constraint on their decisions beyond the effect of liquidity, credit, information, human capital and institutional constraints is commonly assumed but uncommonly studied. And yet the problem of time constraint is particularly salient for low-income individuals and households in developing regions who need to expend more time than their developed world counterparts in managing a basic subsistence.

Context

People living in less developed areas have to spend much more time simply to subsist and manage basic shelter, leaving them less time for income generating work and leisure. These heavy time constraints affect important decisions, such as whether and how much they decide to invest in their education, income-generating activities, training and technologies, their children’s education, household nutrition and health, and several other important investments. This research objective is to understand the significance of time as a constraint for the poor and to provide a direct measure of how individuals in developing regions of the world value time. 

Our measurement of value of time is not bound to outside wages as a reference point or proxy.  We hope that improved knowledge of how value of time varies across several important parameters can be used to better design the timing and targeting of social programs, and, add greater precision to welfare analysis. 

Evaluation Strategy

The authors propose an information-task platform on mobile phone networks to enable the measurement of the value of time and its variation across individual characteristics, demographics and time of day/week/month/year. The platform will be an income generating and an information-collecting opportunity, combining customers that create and finance information tasks and users who are offered these tasks with the opportunity to earn income for the provided information.

Time spent on a task will be matched with the amount of money individuals are willing to receive for that time over large sample sizes and several repeated iterations. The researchers want to find how the subjective valuations of time change across different demographic profiles (sex, age, ethnicity and language), socioeconomic backgrounds (education, type of employment, household size, etc.) and local geo-political, economic and health conditions. 

This solution is valuable in providing this important measure of time value in addition to providing a scalable method of cost-effective surveying.  Further experiments in time discounting and dynamic labor markets and networks are readily testable as well.

Results and Policy Implications

In Kenya, the technical components of the system have been developed that provide a toll-free SMS shortcode and voice number that are connected to an automated sequence of questions over both text messaging and interactive voice response (IVR) technologies.  A small text-based pilot has been run with study participants in and around Siaya Town.  A secondary pilot leveraging the voice component of the system will soon launch with an implementing partner, Uliza.  A larger text and voiced based research initiative is in its early stages involving a large non-profit that works with hundreds of thousands of smallholder farmers.