Time and Money - Substitutes in real terms and complements in satisfactions

Time and money are basic commodities in the utility function and are substitutes in real terms. To a certain extent, having time and money is a matter of either or, depending on individual preferences and budget constraints. At the same time, however, satisfaction with time and satisfaction with money are typically complements; i.e. individuals are equally satisfied with both domains. In this paper, we provide an explanation for this apparent paradox through the analysis of the determination of economic satisfaction and leisure satisfaction, respectively. We test a number of hypotheses, including that leisure satisfaction depends both on the quantity and quality of leisure where quality is proxied by good intensiveness and social intensiveness. Our results show that both the quantity of leisure as well as the quality are important determinants of leisure satisfaction; and since having money contributes to the quality, this explains the empirical finding of satisfactions being complementary at the same time as domains being substitutes.