Benefits of Leisure on the Individual

Benefits of Leisure on the Individual Introduction / Summary In previous contributions, there should have been wide discussions to draw the limits of leisure. I would like to get assistance one that you have read those chapters, in order to write some introductory paragraph that lets the reader know if my contribution is particularly related to some other one. In this contribution, I will analyze it by using the subjective well-being approach. I will use the leisure experience dimension (as described bellow), and I will study the determinants of subjective well-being. There will be plenty of conceptual discussion, some regularities will be reported, an empirical exercise will be performed results analyzed, and some insights for future research will be presented. In this paper, we will study leisure and its beneficial aspects over individual welfare by using a quite new approach: the subjective well-being or happiness approach to measure individual welfare. Along the discussion, we will present two main points. First, we will discuss on the dimensions of leisure in order to justify that by using subjective well-being procedures, we can get a comprehensive approximation to the, somehow difficult to measure, leisure concept. Second, to determine which are the personal and environmental factors that are needed so an individual can produce and consume enjoyable leisure experiences. In this chapter, we are not going to consider that leisure is just free time, i.e. time that is not dedicated to market work, nor to household maintenance activities. We are not even going to consider that leisure is discretionary time (Goodin, et al. 2005). What we state is that leisure is a universal human need that has to be fulfilled by the production in the household and the personal consumption of what we may call leisure experiences. Each experience is a commodity that enters directly in the individuals utility function. This means that leisure is one of the arguments of the utility function of the individual, one of the instances from which she will get welfare. By doing this, we will adopt from the beginning a beckerian approach (Becker, 1965, and 1990). Other arguments are (Gronau and Hamermesh, 2006). From that list of commodities, we can agree that leisure is the most time intensive one. Individuals have this particular basic need, leisure, to be fulfilled using the most suitable combination of personal resources. As always, we are living in a scarce world where every input has some alternative use, so people have to make allocation choices about the best way to fulfill this leisure need as well as others such as food, shelter, and so on. However, we will introduce into our analysis a basic feature of leisure: the presence of enjoyable others. Only recently has this aspect been introduced in the economic analysis of leisure (Osberg, 2009). In this paper, we address the question of how personal inputs are optimally combined to satisfy the leisure need in a social context. By means the analysis of the leisure domain satisfaction, we will be able to asses how personal free time transforms into leisure and how this outcome contributes to individual welfare. Each person would define the boundaries of leisure on the basis of her tastes, on different resource availability to fulfill her needs, and may value the final outcome in many different ways depending on the social norms, her personal aspirations, social interactions and past experiences. Since using a personal definition of leisure would make any analysis impossible, we will present the main three different constructions of leisure, as proposed by Kelly (1982). The first approach of leisure is the most basic one that defines leisure as quantifiable leisure time, either residual or discretional, based on the freedom to choose. The second one defines leisure as the activity that is chosen at a given time and place so that it is the quality of the activity which defines it as leisure. The third one defines leisure as a subjective condition on the grounds of a freely chosen experience based on intrinsic motivation. The integrative approach proposed by Kelly is the one that we follow in this research, where Leisure is an action that takes place at a given time, develops an identifiable activity and is perceived as a pleasant experience by the actor. In what follows, we would refer to this last integrative approach either as leisure or leisure experience. Actually, it fits very well with the following definition of leisure satisfaction by Beard and Ragheb (1980). For them, leisure satisfaction is the positive perceptions or feelings that an individual forms, elicits, or gains as a result of engaging in leisure activities and choices. It is the degree to which one is presently content or pleased with her general leisure experiences and situations. This positive feeling of pleasure results from the satisfaction of felt or unfelt needs of the individual. Traditional economic theory studies human behavior by means of individual’s observed choices. In such a spirit, observed time allocation can be an outcome of interest recorded on time-use surveys. Actually, as we will discuss in the concluding section, time-use registers are a very valuable source of information, and many of the questions that we are going to address could be complementarily studied by testing those hypotheses with that type of data. However, even if some authors consider that time is the ultimate source of utility, time by itself provides no utility to individuals, since the mere passing of time does not fulfill any human need (possibly except from sleeping time). Moreover, since we have no means of observing the final leisure output, we have to rely on the subjective assessment of how satisfied people feel with the leisure that they enjoy. At the end of the day, the main challenge is to determine how an unobservable, such as leisure, can contribute to individual welfare. In this case, we are considering a double black-box. First, not everyone defines leisure in the same way and not everyone produces leisure experiences by using the same technology or the same inputs. For some people, the presence of others will be much more needed that for some other people. Some people could be much more materialistic than others. Some people could be much more efficient in the production of pleasurable experiences because of their higher education. Second, as indicated before, we know that leisure contributed to enhance the quality of life of people, but the valuation of those experiences is determined by societal norms and arrangements and by personal aspirations, past experiences and comparison effects. Next section will present the happiness or subjective well-being approach. We will introduce a brief discussion of the rationale for using this approach for economic research and for leisure research. To do so, we will present the domain approach; in this setting, leisure satisfaction will be considered a mediator between individual leisure experience and overall satisfaction or happiness. In section 3, we will discuss the relationship between leisure time and well-being. Other crucial aspects will be discussed in section 4, where we review a series of social and economic factors that are said to influence leisure enjoyment, so leisure has a high quality and contributes to a better quality of life. Particularly, we will report previous findings on the social dimension of leisure, one of the attributes that determine high quality leisure experiences. In that same section, some determinants of overall satisfaction, or of particular domain satisfaction will be discussed. Last, sections 5 and 6 will present, respectively, some conclusions and a brief overview of needed research to better understand the contribution of leisure to a better quality of life. Subjective well-being approach Traditional research on quality of life relied heavily on objective and materialistic indicators of living conditions. Actually, Gross Domestic Product has been the â€Å"champion† indicator when studying the evolution of living standards and when comparing economies (Mankiw, 2007). Under the realm of objective indicators, nearly all non market activities and many aspects of human development, such as leisure, are neglected. New studies have highlighted the superiority of including the subjective approach to the investigation of quality of life in developed and developing societies, and happiness research has become quite of a fashionable and popular topic (Layard, 2006). There is a growing interest on using the subjective well-being approach to analyze living conditions and there has been an emerging literature on social sciences. Among other reasons for that flourishing, we can highlight the following: (i) this approach offers richer insight about the quality of life, and considers other indicators of development apart from the traditional indicators; (ii) nowadays there is more information available about living conditions, opinions and perceptions of people and societies, and; (iii) with this approach it is possible to identify the major needs and problems of the population, which is useful for governments and policy makers (Frey and Stutzer, JEL 2002). Economists and other social scientists broadly define `happiness and `life satisfaction as subjective well-being. Following Diener and Seligman (2004, pp. 4) life satisfaction is defined as a global judgment of well-being based on information the person believes is relevant, while well-being includes all of the evaluations, both cognitive and affective, that people make of their lives and components of their lives. While according to some authors, the terms happiness, subjective wellbeing, well-being, satisfaction and quality of life are somewhat different and each have their own specific meaning, responses in different surveys are highly correlated (Fordyce, 1988; Frey and Stutzer, 2002b), and many analyses use them indiscriminately. In this current study these terms are used with the understanding that they have a similar connotation. The present study will use a bottom-up approach to the analysis of subjective well-being. This approach considers that overall life satisfaction is determined by what is called domain satisfaction; the evaluation of own personal situation on different dimensions of life such as: financial situation, housing conditions, health, leisure, job or education, among other dimensions. Some authors signal the mediator role of those domain satisfactions to determine overall happiness (Cummins, 1996; van Praag et al., 2003; Easterlin and Sawangfa, 2007). In what follows, we will consider that leisure satisfaction has leisure experiences as the main input; higher leisure satisfaction will contribute, in turn, to higher overall satisfaction or happiness. In order to assess the size of different influences upon happiness and satisfaction with life in general, psychologists have been using surveys since long ago, while only recently economists have recognized that there is useful information in a subjective well-being answer as an empirical approximation for the theoretical concept of utility. With the exception of the seminal work of Easterlin (1974), most research has taken place during the last two decades. The existing state of research suggests that, for many purposes, happiness or reported subjective well-being is a satisfactory empirical proxy of individual utility. From the information about the determinants of individual happiness, different situations of economic and social policies inside a country or a region can be analyzed . Frey and Stutzer (2002b) give some important reasons for economists to consider happiness research. First, happiness research can help to evaluate net effects, in terms of individual utilities, for different economic policies. Understanding the determinants of subjective well-being can thus usefully inform economic policy decisions. Second, this research also has relevance to economists because of the effect of institutional conditions such as the quality of governance and the size of social capital on individual well-being. It may also help to solve empirical puzzles that conventional economic theories find difficult to explain. For instance, using this approach it is possible to understand why for several countries since World War ll although they have raised their real income drastically, the self-reported subjective well-being of the population has not increased or has even slightly fallen. Data about happiness are collected through direct questioning via interviews or self-administered questionnaires in which individuals self-rate their happiness on a single item or on a multi-item scale. These scales offer a list of options, which are ranked according to the levels of happiness . Most studies of subjective well-being are based on some variation on the question How satisfied (or happy) are you with your life? The range of possible responses is defined over a scale that varies between datasets (one to four, one to seven, or one to ten), the lowest grades indicating a poor level of life satisfaction. The main use of happiness measures is not to compare levels in an absolute sense but rather to seek to identify the determinants of happiness. The strategy is to use the answers that people give when asked questions about how happy they feel with life. Similar questions are posed with respect to job satisfaction, health satisfaction, housing satisfaction, satisfaction with marital relation, etc. †¦, and leisure satisfaction or satisfaction with leisure time. This study of the different aspects of life is called domain satisfaction. Although this approach could have limitations, as was said by Oswald (1997, p. 1816) if the aim is to learn about what makes people tick, listening to what they say seems likely to be a natural first step. The domains-of-life literature states that life can be approached as a general construct of many specific domains, and that life satisfaction can be understood as a result from satisfaction in these domains of life (Cummins, 1996; van Praag et.al, 2003; Easterlin and Sawangfa, 2007; Rojas, 2006a, 2006b). It is evident that different domains may be distinguished. In many studies, the domains to be analyzed are determined by data availability. For instance, in the British Household Panel Survey leisure satisfaction is split up into two sub-dimensions; namely, the amount of leisure and use of the leisure time (Van Praag and Ferrer-i-Carbonell, 2007); the European Community Household Panel considers only satisfaction with leisure time , and the Latinobarà ³metro only includes satisfaction with the amount of leisure (Rojas, XXXX). Rojas (2007) affirms that the enumeration and demarcation of the domains of life are arbitrary. In addition to this, there are many possible partitions of a human life, and the selected partition depends on the researchs objectives and the available information. For example, Cummins (1996) has argued for a seven-domain partition: material well-being, health, productivity intimacy, safety, community and emotional well-being; van Praag et al. (2003) study the relationship of satisfaction in different domains of life (health, financial situation, job, housing, leisure and environment) and satisfaction with life as a whole. Rojas (2006b and 2007), on the basis of factor analysis, identified seven domains of life: health, economic, job, family, friendship, personal and community. Using information from Mexico , he showed that satisfaction in the family domain is crucial for life satisfaction. Family satisfaction includes aspects of satisfaction with ones spouse, children and with the rest of the family. Rojas also showed that the satisfaction in the health, job and personal domains is also very important for a persons happiness. Satisfaction in areas such as housing and living conditions, financial solvency and income are relatively less important for life satisfaction. Rojas (2007) found that income is an explanatory variable of relevancy for economic and labor satisfaction, but not for family satisfaction or leisure satisfaction. For that reason, it is possible to find situations where a person is satisfied with his/her life while he/she is unsatisfied economically, or where a person is unsatisfied wit h his/her life and, at the same time, his/her economic satisfaction is high (Rojas, 2008b). Empirical research has focused on different factors associated with subjective well-being and satisfaction. In agreement with psychological and sociological studies (Argyle, 1999), economic research has identified a set of personal and social characteristics associated with life satisfaction. Most studies using data from North America and European countries have found the level of reported life satisfaction to be high among those who are married (Blanchflower and Oswald, 2004b; Easterlin, 2003; Carroll, 2007; Clark et al., 2005; Ferrer-i-Carbonell and Frijters, 2004), women (Oswald, 1997; Clark, 1997), whites (Oswald, 1997; Alesina et al., 2004), the well-educated (Blanchflower and Oswald, 2004a; Frey and Stutzer, 2003; Borooah, 2005), the self-employed (Blanchflower, 2000; Blanchflower, 2004; Frey and Benz, 2003; Alesina et al., 2004), the retired (Di Tella et al., 2003), and those occupied with home duties (Di Tella et al., 2003; Borooah, 2005). The relation between an individuals age and happiness seems to be a bit more complex. Many people believe that the quality of life deteriorates with age and that old people should be unhappier than young people since the old tend to have a worse health, less income, and few are married. Nevertheless, many studies have surprisingly thought that old people report levels of happiness comparatively higher than young people, though this effect tends to be small. Frey and Stutzer (2001) have indicated four reasons that can explain this positive relationship between age and happiness: (i) the old have lower expectations and aspirations. For example, an elderly person waits to remain without work and possibly widower, so the effects of the loss will be lower on the old than on the young. (ii) They have little disparity between goals and achievements, since the eldelrlys goals are fixed closer to what reasonably they can reach. (iii) Older individuals have had more time to adjust to their life conditions, and (iv) old people have learned how to reduce the negative events of the life and how to regulate the negative affects. Besides, economists have identified a U-shape in the relationship between age and happiness (e.g. Oswald, 1997; Blanchflower and Oswald, 2004a). This implies a convex shape in the relationship of life satisfaction with age. Life satisfaction decreases with age until it reaches a minimum, increasing afterwards. For North America and European countries this minimum typically occurs in the forties (43 in Frey and Stutzer (2001) and Ferrer-i-Carbonell (2005); 46 in Peiro (2007)). Aspirations and comparisons effects also are important in relation with income and other factors affecting subjective well-being. The individuals reported subjective well-being in the present is based on a norm of what is `bad, `sufficient or `good. Such norms not only depend on the present situation, but also on what the individual has experienced in the past, on what he/she expects to experience in the future and on what other people think and do (van Praag and Ferrer-i-Carbonell, 2004). In relation with income, individual well-being does not only depend on income in absolute terms but also on the subjective perception of whether ones income is adequate to satisfy ones needs. In addition, individual income perception is subject to the individuals own situation, past and present, as well as to the income of other people. The latter reflects the importance of the relative position of individuals in society for their satisfaction with life. This is often referred to as the comparison income or relative utility effect. It is often argued that individuals adapt to new situations by changing their expectations (Easterlin, 2005; Clark et al., 2008). This implies that higher incomes are accompanied by rising expectations that lead to what is known as the hedonic treadmill (Brickman and Campbell, 1971) or hedonic adaptation (Frederick and Loewenstein, 1999). Thus, individuals strive for high incomes even if these lead only to a temporary or small increase in well-being. This ability to adapt would appear to be a ubiquitous feature of the human condition, some recent examples of adaptation in nonmonetary spheres are Lucas et al. (2003) and Lucas (2005) with respect to marriage and divorce, Wu (2001) and Oswald and Powdthavee (2006) for adaptation to illness or disability, and Lucas et al. (2004) regarding unemployment. The comparisons with different social reference groups are also an important factor that has been widely present in the analysis of two dimensions; namely, the analysis of the effect of relative income on financial satisfaction and/or satisfaction with life as a whole (McBride, 2001; Stutzer, 2004; Luttmer, 2005; Clark, Frijters and Shields, 2008) and the influence of unemployment on subjective well-being. A standard result in happiness literature is that the unemployed report significantly lower levels of subjective well-being than other labor force groups (Winkelman and Winkelman, 1998; Frey and Stutzer, 2002). Indeed, the pecuniary and the non-pecuniary costs of the unemployment are that high that adaptation is non-existent (Lucas et al., 2004) or only very moderate (Clark, 2002). Clark (2003) uses seven waves of the British Household Panel Survey to test for social norms in labor market status. In his analysis, he found that the well-being of the unemployed is the higher, the hig her the unemployment rate in a reference group (at the regional, partner, or household level). It seems that, the more unemployment becomes the norm, the less individuals are affected by it (Winkelman, 2006). Lalive and Stutzer (2004), using a different strategy, obtain the same results for information from Sweden. Social interactions could be either a negative or a positive factor. As previously mentioned, an individuals happiness depends on that individuals own relative (or positional) situation or status, and comparison with others, what would expose that individual to negative externalities in terms of peer-effects (Luttmer, 2005) in utility and/or consumption. Alpizar, Carlsson and Johansson-Stenman (2005) show that positionality matters far more for commodities as houses and cars than for vacation and insurance, but also that both absolute and relative consumption matter for each category, these are positional goods. The positive influence of social interactions may come from social relationships and other relational goods or social capital factors. For instance, Rojas (2007), Winkelman (2006), Argyle (1999), among other social scientists have found that social relationships are a major source of well-being. Although marriage is the relationship that has the most influence on happiness, there are other relationships that affect happiness, as well as health and mental health, by providing social support. Argyle (1999 p. 361) refers some studies where it was found that if all kinds of social support are combined, a social support factor is found to have a strong correlation of 0.50 with happiness. Social scientists in many countries have observed that social support or social networks (and the associated norms of reciprocity and trust (Helliwell and Putnam, 2004)) have powerful effects on the level and efficiency of production and well-being, broadly defined, and they have used the term social capital to refer to these effects (Coleman, 1988; Putnam, 2000; Woolcock and Narayan, 2000). Lately, some cross-sectional studies from both sociology and economics have shown the importance of key aspects of social capital such as trust, social contacts and membership in voluntary associations over individual well-being (Inglehart 1999; Putnam 2000; Helliwell 2003 and 2006b; Powdthavee, 2008). In Bowling Alone, Putnam (2000) suggested that people prosper in neighborhoods and societies where social capital is high, that is, where people trust one another and are mutually helpful. Putnam reviewed evidence showing that communities with high rates of volunteer activity, club membership, church membership, and social entertaining (all thought to be indirect manifestations of social capital) all had higher well-being than communities that were impoverish these characteristics. Many studies that use cross-sectional data have shown that individuals with rich networks of active social relationships, that do not include people living in the same household, tend to be happier with th eir lives (Phillips 1967; Burt 1987). Helliwell (2003) reported that well-being is high and suicide rates are low where trust in others is high, and he also found that well-being is high where memberships in organizations outside of work are at high levels. Thus, there is evidence that individuals are more likely to experience high well-being when they live in nations with high social capital than when they live in nations with low social capital, a finding that dovetails with the results of studies on individuals social interactions. Helliwell and Putnam (2004) and Powdthavee (2008) are comprehensive reviews about the importance of social capital factor over subjective well-being. Health status is a factor that can be expected to be an important determinant of life satisfaction. In the 1950s the use of concepts such as welfare, adjustment and mental health had much in common with the traditional concept about happiness (Argyle, 1991). Research on the health-related quality of life was developed in the mid 1970s by health scientists and psychologists in order to track peoples perception of their health status (Gough et al., 2007). This was mainly in response to the need for more sensitive measures to compare treatments for chronic illness and to identify the most cost-effective treatments . Good health is considered an important factor included in the capabilities and the necessary functionalities in order for an individual to face life (Deaton, 2007; Sen, 1999). Since the 1980s the state of health has been identified as an important determinant of life satisfaction, as happy people are healthier, both physically and mentally (Veenhoven, 1991; Argyle, 1999). Co nsequently, poor health, which limits an individuals ability to carry out their daily activities, reduces overall satisfaction. The literature about subjective well-being in Latin American countries is few and very recent. Graham and Pettinato (2001) were some of the first to analyze Latin American countries. Using the Latinobarà ³metro 2000, they found that Latin America is not all that different from the advanced industrial economies in relation to some of the determinants of happiness. Similar to the OECD countries, happiness has a quadratic relationship with age, initially decreasing and then increasing monotonically after 49 years of age. As in the industrial countries, being married had positive and significant effects. In contrast to the advanced economies, a significant gender effect was no found in Latin America. Also, as in the industrial countries, the coefficients for level of wealth were strong, positive, and significant in happiness. When wealth was included in the regressions, the coefficient for education level became insignificant or weakly significant, depending on the regression used. Bein g self-employed or unemployed both had significant and negative effects on happiness. When they included country-fixed effects, the coefficient on self-employment became insignificant. While being unemployed also has negative effects on happiness in the advanced industrial economies, being self-employed has positive effects. The most credible explanation is intuitive and it was given by the authors: most self-employed people in the latter are self-employed by choice, while in developing economies, many are self-employed due to the absence of more secure employment opportunities and live a precarious existence in the informal sector. Other analyses by countries have been conducted in Latin America. Among the most important, Rojas (2006b and 2007), using the domains-of-life approach in Mexico, found that people are on average, more satisfied in the family domain, while they are less satisfied in the consumption, personal and job domains. Rojas (2007) found that income is an explanatory variable of relevancy for the economic and labor satisfaction, but not for either family or leisure satisfaction. Due to that, he found a weak relationship between income and life satisfaction Gerstenbluth et al. (2007) studied the relationship between happiness and health in Argentina and Uruguay using the Latinobarà ³metro 2004. Cruz and Torres (2006), using the Encuesta de Calidad de Vida 2003, tested various happiness hypotheses among Colombians and Cid et al. (2008), using the survey called Salud, Bienestar y Envejecimiento en Amà ©rica Latina y el Caribe (SABE), explored the correlation between happiness and income in the el derly in Uruguay. To our knowledge, the previous studies conducted about Latin America have not included the effect of social capital on subjective well-being, and they have analyzed the self-employment as a homogeneous labor market status. However, when considering the specificity of the leisure domain, we should take into account that while satisfaction with other realms of life may lie upon the valuation of objective situations (such as one’s financial situation, health or housing conditions), satisfaction with leisure brings in an additional challenge as individual’s boundaries of leisure are defined by her perception of what is pleasant (Ateca-Amestoy et al., 2008). Conceptual discussion on the nature of leisure time in contemporary societies Time allocation decisions within the family: economic approaches and models. We will attach to the economic approach to human behavior by Becker (moreover, bring arguments such as those contained in a theory of social interactions). Temporal autonomy is a matter of having discretionary control over your time. Discretionary Time. A New Measure of Freedom (Goodin et al., 2005) Other approaches: we have found these relevant arguments: Veblens theory The omnivore Bourdieus distinction Putnams social capital 3.1. What is Social Capital? There is a traditional consensus that there exists three distincs traditions that conceptualize and analyze social capital. All three would be relevant for our reasoning. Pierre Bourdieu bourdieu2: who conceptualised social capital as the `actual or potential resources that an individual has at his/her disposal as a result of `a durable network of more or less institutionalised relationships of mutual acquaintance and recognition, i.e. membership in a group. Some authors point out that this definition must be viewed as part of his broader concern with developing the different types of capital in order to explain the means by which the social stratification system is preserved and the dominant class-reproduction strategy is legitimised. J.S. Coleman coleman defines it as the set of resources that inhere in family relations and in community social organisations and that are useful for the cognitive or social development of a child or young person. Social relations were viewed by Coleman to make up important `capital resources for individuals by means of processes such as setting `obligations, expectations and trustworthiness, creating channels for information, and setting norms backed by efficient sanctions. These resources may be influenced by factors such as generalised trustworthiness which ensures that obligations are met, the extent to which a person is in Benefits of Leisure on the Individual Benefits of Leisure on the Individual Introduction / Summary In previous contributions, there should have been wide discussions to draw the limits of leisure. I would like to get assistance one that you have read those chapters, in order to write some introductory paragraph that lets the reader know if my contribution is particularly related to some other one. In this contribution, I will analyze it by using the subjective well-being approach. I will use the leisure experience dimension (as described bellow), and I will study the determinants of subjective well-being. There will be plenty of conceptual discussion, some regularities will be reported, an empirical exercise will be performed results analyzed, and some insights for future research will be presented. In this paper, we will study leisure and its beneficial aspects over individual welfare by using a quite new approach: the subjective well-being or happiness approach to measure individual welfare. Along the discussion, we will present two main points. First, we will discuss on the dimensions of leisure in order to justify that by using subjective well-being procedures, we can get a comprehensive approximation to the, somehow difficult to measure, leisure concept. Second, to determine which are the personal and environmental factors that are needed so an individual can produce and consume enjoyable leisure experiences. In this chapter, we are not going to consider that leisure is just free time, i.e. time that is not dedicated to market work, nor to household maintenance activities. We are not even going to consider that leisure is discretionary time (Goodin, et al. 2005). What we state is that leisure is a universal human need that has to be fulfilled by the production in the household and the personal consumption of what we may call leisure experiences. Each experience is a commodity that enters directly in the individuals utility function. This means that leisure is one of the arguments of the utility function of the individual, one of the instances from which she will get welfare. By doing this, we will adopt from the beginning a beckerian approach (Becker, 1965, and 1990). Other arguments are (Gronau and Hamermesh, 2006). From that list of commodities, we can agree that leisure is the most time intensive one. Individuals have this particular basic need, leisure, to be fulfilled using the most suitable combination of personal resources. As always, we are living in a scarce world where every input has some alternative use, so people have to make allocation choices about the best way to fulfill this leisure need as well as others such as food, shelter, and so on. However, we will introduce into our analysis a basic feature of leisure: the presence of enjoyable others. Only recently has this aspect been introduced in the economic analysis of leisure (Osberg, 2009). In this paper, we address the question of how personal inputs are optimally combined to satisfy the leisure need in a social context. By means the analysis of the leisure domain satisfaction, we will be able to asses how personal free time transforms into leisure and how this outcome contributes to individual welfare. Each person would define the boundaries of leisure on the basis of her tastes, on different resource availability to fulfill her needs, and may value the final outcome in many different ways depending on the social norms, her personal aspirations, social interactions and past experiences. Since using a personal definition of leisure would make any analysis impossible, we will present the main three different constructions of leisure, as proposed by Kelly (1982). The first approach of leisure is the most basic one that defines leisure as quantifiable leisure time, either residual or discretional, based on the freedom to choose. The second one defines leisure as the activity that is chosen at a given time and place so that it is the quality of the activity which defines it as leisure. The third one defines leisure as a subjective condition on the grounds of a freely chosen experience based on intrinsic motivation. The integrative approach proposed by Kelly is the one that we follow in this research, where Leisure is an action that takes place at a given time, develops an identifiable activity and is perceived as a pleasant experience by the actor. In what follows, we would refer to this last integrative approach either as leisure or leisure experience. Actually, it fits very well with the following definition of leisure satisfaction by Beard and Ragheb (1980). For them, leisure satisfaction is the positive perceptions or feelings that an individual forms, elicits, or gains as a result of engaging in leisure activities and choices. It is the degree to which one is presently content or pleased with her general leisure experiences and situations. This positive feeling of pleasure results from the satisfaction of felt or unfelt needs of the individual. Traditional economic theory studies human behavior by means of individual’s observed choices. In such a spirit, observed time allocation can be an outcome of interest recorded on time-use surveys. Actually, as we will discuss in the concluding section, time-use registers are a very valuable source of information, and many of the questions that we are going to address could be complementarily studied by testing those hypotheses with that type of data. However, even if some authors consider that time is the ultimate source of utility, time by itself provides no utility to individuals, since the mere passing of time does not fulfill any human need (possibly except from sleeping time). Moreover, since we have no means of observing the final leisure output, we have to rely on the subjective assessment of how satisfied people feel with the leisure that they enjoy. At the end of the day, the main challenge is to determine how an unobservable, such as leisure, can contribute to individual welfare. In this case, we are considering a double black-box. First, not everyone defines leisure in the same way and not everyone produces leisure experiences by using the same technology or the same inputs. For some people, the presence of others will be much more needed that for some other people. Some people could be much more materialistic than others. Some people could be much more efficient in the production of pleasurable experiences because of their higher education. Second, as indicated before, we know that leisure contributed to enhance the quality of life of people, but the valuation of those experiences is determined by societal norms and arrangements and by personal aspirations, past experiences and comparison effects. Next section will present the happiness or subjective well-being approach. We will introduce a brief discussion of the rationale for using this approach for economic research and for leisure research. To do so, we will present the domain approach; in this setting, leisure satisfaction will be considered a mediator between individual leisure experience and overall satisfaction or happiness. In section 3, we will discuss the relationship between leisure time and well-being. Other crucial aspects will be discussed in section 4, where we review a series of social and economic factors that are said to influence leisure enjoyment, so leisure has a high quality and contributes to a better quality of life. Particularly, we will report previous findings on the social dimension of leisure, one of the attributes that determine high quality leisure experiences. In that same section, some determinants of overall satisfaction, or of particular domain satisfaction will be discussed. Last, sections 5 and 6 will present, respectively, some conclusions and a brief overview of needed research to better understand the contribution of leisure to a better quality of life. Subjective well-being approach Traditional research on quality of life relied heavily on objective and materialistic indicators of living conditions. Actually, Gross Domestic Product has been the â€Å"champion† indicator when studying the evolution of living standards and when comparing economies (Mankiw, 2007). Under the realm of objective indicators, nearly all non market activities and many aspects of human development, such as leisure, are neglected. New studies have highlighted the superiority of including the subjective approach to the investigation of quality of life in developed and developing societies, and happiness research has become quite of a fashionable and popular topic (Layard, 2006). There is a growing interest on using the subjective well-being approach to analyze living conditions and there has been an emerging literature on social sciences. Among other reasons for that flourishing, we can highlight the following: (i) this approach offers richer insight about the quality of life, and considers other indicators of development apart from the traditional indicators; (ii) nowadays there is more information available about living conditions, opinions and perceptions of people and societies, and; (iii) with this approach it is possible to identify the major needs and problems of the population, which is useful for governments and policy makers (Frey and Stutzer, JEL 2002). Economists and other social scientists broadly define `happiness and `life satisfaction as subjective well-being. Following Diener and Seligman (2004, pp. 4) life satisfaction is defined as a global judgment of well-being based on information the person believes is relevant, while well-being includes all of the evaluations, both cognitive and affective, that people make of their lives and components of their lives. While according to some authors, the terms happiness, subjective wellbeing, well-being, satisfaction and quality of life are somewhat different and each have their own specific meaning, responses in different surveys are highly correlated (Fordyce, 1988; Frey and Stutzer, 2002b), and many analyses use them indiscriminately. In this current study these terms are used with the understanding that they have a similar connotation. The present study will use a bottom-up approach to the analysis of subjective well-being. This approach considers that overall life satisfaction is determined by what is called domain satisfaction; the evaluation of own personal situation on different dimensions of life such as: financial situation, housing conditions, health, leisure, job or education, among other dimensions. Some authors signal the mediator role of those domain satisfactions to determine overall happiness (Cummins, 1996; van Praag et al., 2003; Easterlin and Sawangfa, 2007). In what follows, we will consider that leisure satisfaction has leisure experiences as the main input; higher leisure satisfaction will contribute, in turn, to higher overall satisfaction or happiness. In order to assess the size of different influences upon happiness and satisfaction with life in general, psychologists have been using surveys since long ago, while only recently economists have recognized that there is useful information in a subjective well-being answer as an empirical approximation for the theoretical concept of utility. With the exception of the seminal work of Easterlin (1974), most research has taken place during the last two decades. The existing state of research suggests that, for many purposes, happiness or reported subjective well-being is a satisfactory empirical proxy of individual utility. From the information about the determinants of individual happiness, different situations of economic and social policies inside a country or a region can be analyzed . Frey and Stutzer (2002b) give some important reasons for economists to consider happiness research. First, happiness research can help to evaluate net effects, in terms of individual utilities, for different economic policies. Understanding the determinants of subjective well-being can thus usefully inform economic policy decisions. Second, this research also has relevance to economists because of the effect of institutional conditions such as the quality of governance and the size of social capital on individual well-being. It may also help to solve empirical puzzles that conventional economic theories find difficult to explain. For instance, using this approach it is possible to understand why for several countries since World War ll although they have raised their real income drastically, the self-reported subjective well-being of the population has not increased or has even slightly fallen. Data about happiness are collected through direct questioning via interviews or self-administered questionnaires in which individuals self-rate their happiness on a single item or on a multi-item scale. These scales offer a list of options, which are ranked according to the levels of happiness . Most studies of subjective well-being are based on some variation on the question How satisfied (or happy) are you with your life? The range of possible responses is defined over a scale that varies between datasets (one to four, one to seven, or one to ten), the lowest grades indicating a poor level of life satisfaction. The main use of happiness measures is not to compare levels in an absolute sense but rather to seek to identify the determinants of happiness. The strategy is to use the answers that people give when asked questions about how happy they feel with life. Similar questions are posed with respect to job satisfaction, health satisfaction, housing satisfaction, satisfaction with marital relation, etc. †¦, and leisure satisfaction or satisfaction with leisure time. This study of the different aspects of life is called domain satisfaction. Although this approach could have limitations, as was said by Oswald (1997, p. 1816) if the aim is to learn about what makes people tick, listening to what they say seems likely to be a natural first step. The domains-of-life literature states that life can be approached as a general construct of many specific domains, and that life satisfaction can be understood as a result from satisfaction in these domains of life (Cummins, 1996; van Praag et.al, 2003; Easterlin and Sawangfa, 2007; Rojas, 2006a, 2006b). It is evident that different domains may be distinguished. In many studies, the domains to be analyzed are determined by data availability. For instance, in the British Household Panel Survey leisure satisfaction is split up into two sub-dimensions; namely, the amount of leisure and use of the leisure time (Van Praag and Ferrer-i-Carbonell, 2007); the European Community Household Panel considers only satisfaction with leisure time , and the Latinobarà ³metro only includes satisfaction with the amount of leisure (Rojas, XXXX). Rojas (2007) affirms that the enumeration and demarcation of the domains of life are arbitrary. In addition to this, there are many possible partitions of a human life, and the selected partition depends on the researchs objectives and the available information. For example, Cummins (1996) has argued for a seven-domain partition: material well-being, health, productivity intimacy, safety, community and emotional well-being; van Praag et al. (2003) study the relationship of satisfaction in different domains of life (health, financial situation, job, housing, leisure and environment) and satisfaction with life as a whole. Rojas (2006b and 2007), on the basis of factor analysis, identified seven domains of life: health, economic, job, family, friendship, personal and community. Using information from Mexico , he showed that satisfaction in the family domain is crucial for life satisfaction. Family satisfaction includes aspects of satisfaction with ones spouse, children and with the rest of the family. Rojas also showed that the satisfaction in the health, job and personal domains is also very important for a persons happiness. Satisfaction in areas such as housing and living conditions, financial solvency and income are relatively less important for life satisfaction. Rojas (2007) found that income is an explanatory variable of relevancy for economic and labor satisfaction, but not for family satisfaction or leisure satisfaction. For that reason, it is possible to find situations where a person is satisfied with his/her life while he/she is unsatisfied economically, or where a person is unsatisfied wit h his/her life and, at the same time, his/her economic satisfaction is high (Rojas, 2008b). Empirical research has focused on different factors associated with subjective well-being and satisfaction. In agreement with psychological and sociological studies (Argyle, 1999), economic research has identified a set of personal and social characteristics associated with life satisfaction. Most studies using data from North America and European countries have found the level of reported life satisfaction to be high among those who are married (Blanchflower and Oswald, 2004b; Easterlin, 2003; Carroll, 2007; Clark et al., 2005; Ferrer-i-Carbonell and Frijters, 2004), women (Oswald, 1997; Clark, 1997), whites (Oswald, 1997; Alesina et al., 2004), the well-educated (Blanchflower and Oswald, 2004a; Frey and Stutzer, 2003; Borooah, 2005), the self-employed (Blanchflower, 2000; Blanchflower, 2004; Frey and Benz, 2003; Alesina et al., 2004), the retired (Di Tella et al., 2003), and those occupied with home duties (Di Tella et al., 2003; Borooah, 2005). The relation between an individuals age and happiness seems to be a bit more complex. Many people believe that the quality of life deteriorates with age and that old people should be unhappier than young people since the old tend to have a worse health, less income, and few are married. Nevertheless, many studies have surprisingly thought that old people report levels of happiness comparatively higher than young people, though this effect tends to be small. Frey and Stutzer (2001) have indicated four reasons that can explain this positive relationship between age and happiness: (i) the old have lower expectations and aspirations. For example, an elderly person waits to remain without work and possibly widower, so the effects of the loss will be lower on the old than on the young. (ii) They have little disparity between goals and achievements, since the eldelrlys goals are fixed closer to what reasonably they can reach. (iii) Older individuals have had more time to adjust to their life conditions, and (iv) old people have learned how to reduce the negative events of the life and how to regulate the negative affects. Besides, economists have identified a U-shape in the relationship between age and happiness (e.g. Oswald, 1997; Blanchflower and Oswald, 2004a). This implies a convex shape in the relationship of life satisfaction with age. Life satisfaction decreases with age until it reaches a minimum, increasing afterwards. For North America and European countries this minimum typically occurs in the forties (43 in Frey and Stutzer (2001) and Ferrer-i-Carbonell (2005); 46 in Peiro (2007)). Aspirations and comparisons effects also are important in relation with income and other factors affecting subjective well-being. The individuals reported subjective well-being in the present is based on a norm of what is `bad, `sufficient or `good. Such norms not only depend on the present situation, but also on what the individual has experienced in the past, on what he/she expects to experience in the future and on what other people think and do (van Praag and Ferrer-i-Carbonell, 2004). In relation with income, individual well-being does not only depend on income in absolute terms but also on the subjective perception of whether ones income is adequate to satisfy ones needs. In addition, individual income perception is subject to the individuals own situation, past and present, as well as to the income of other people. The latter reflects the importance of the relative position of individuals in society for their satisfaction with life. This is often referred to as the comparison income or relative utility effect. It is often argued that individuals adapt to new situations by changing their expectations (Easterlin, 2005; Clark et al., 2008). This implies that higher incomes are accompanied by rising expectations that lead to what is known as the hedonic treadmill (Brickman and Campbell, 1971) or hedonic adaptation (Frederick and Loewenstein, 1999). Thus, individuals strive for high incomes even if these lead only to a temporary or small increase in well-being. This ability to adapt would appear to be a ubiquitous feature of the human condition, some recent examples of adaptation in nonmonetary spheres are Lucas et al. (2003) and Lucas (2005) with respect to marriage and divorce, Wu (2001) and Oswald and Powdthavee (2006) for adaptation to illness or disability, and Lucas et al. (2004) regarding unemployment. The comparisons with different social reference groups are also an important factor that has been widely present in the analysis of two dimensions; namely, the analysis of the effect of relative income on financial satisfaction and/or satisfaction with life as a whole (McBride, 2001; Stutzer, 2004; Luttmer, 2005; Clark, Frijters and Shields, 2008) and the influence of unemployment on subjective well-being. A standard result in happiness literature is that the unemployed report significantly lower levels of subjective well-being than other labor force groups (Winkelman and Winkelman, 1998; Frey and Stutzer, 2002). Indeed, the pecuniary and the non-pecuniary costs of the unemployment are that high that adaptation is non-existent (Lucas et al., 2004) or only very moderate (Clark, 2002). Clark (2003) uses seven waves of the British Household Panel Survey to test for social norms in labor market status. In his analysis, he found that the well-being of the unemployed is the higher, the hig her the unemployment rate in a reference group (at the regional, partner, or household level). It seems that, the more unemployment becomes the norm, the less individuals are affected by it (Winkelman, 2006). Lalive and Stutzer (2004), using a different strategy, obtain the same results for information from Sweden. Social interactions could be either a negative or a positive factor. As previously mentioned, an individuals happiness depends on that individuals own relative (or positional) situation or status, and comparison with others, what would expose that individual to negative externalities in terms of peer-effects (Luttmer, 2005) in utility and/or consumption. Alpizar, Carlsson and Johansson-Stenman (2005) show that positionality matters far more for commodities as houses and cars than for vacation and insurance, but also that both absolute and relative consumption matter for each category, these are positional goods. The positive influence of social interactions may come from social relationships and other relational goods or social capital factors. For instance, Rojas (2007), Winkelman (2006), Argyle (1999), among other social scientists have found that social relationships are a major source of well-being. Although marriage is the relationship that has the most influence on happiness, there are other relationships that affect happiness, as well as health and mental health, by providing social support. Argyle (1999 p. 361) refers some studies where it was found that if all kinds of social support are combined, a social support factor is found to have a strong correlation of 0.50 with happiness. Social scientists in many countries have observed that social support or social networks (and the associated norms of reciprocity and trust (Helliwell and Putnam, 2004)) have powerful effects on the level and efficiency of production and well-being, broadly defined, and they have used the term social capital to refer to these effects (Coleman, 1988; Putnam, 2000; Woolcock and Narayan, 2000). Lately, some cross-sectional studies from both sociology and economics have shown the importance of key aspects of social capital such as trust, social contacts and membership in voluntary associations over individual well-being (Inglehart 1999; Putnam 2000; Helliwell 2003 and 2006b; Powdthavee, 2008). In Bowling Alone, Putnam (2000) suggested that people prosper in neighborhoods and societies where social capital is high, that is, where people trust one another and are mutually helpful. Putnam reviewed evidence showing that communities with high rates of volunteer activity, club membership, church membership, and social entertaining (all thought to be indirect manifestations of social capital) all had higher well-being than communities that were impoverish these characteristics. Many studies that use cross-sectional data have shown that individuals with rich networks of active social relationships, that do not include people living in the same household, tend to be happier with th eir lives (Phillips 1967; Burt 1987). Helliwell (2003) reported that well-being is high and suicide rates are low where trust in others is high, and he also found that well-being is high where memberships in organizations outside of work are at high levels. Thus, there is evidence that individuals are more likely to experience high well-being when they live in nations with high social capital than when they live in nations with low social capital, a finding that dovetails with the results of studies on individuals social interactions. Helliwell and Putnam (2004) and Powdthavee (2008) are comprehensive reviews about the importance of social capital factor over subjective well-being. Health status is a factor that can be expected to be an important determinant of life satisfaction. In the 1950s the use of concepts such as welfare, adjustment and mental health had much in common with the traditional concept about happiness (Argyle, 1991). Research on the health-related quality of life was developed in the mid 1970s by health scientists and psychologists in order to track peoples perception of their health status (Gough et al., 2007). This was mainly in response to the need for more sensitive measures to compare treatments for chronic illness and to identify the most cost-effective treatments . Good health is considered an important factor included in the capabilities and the necessary functionalities in order for an individual to face life (Deaton, 2007; Sen, 1999). Since the 1980s the state of health has been identified as an important determinant of life satisfaction, as happy people are healthier, both physically and mentally (Veenhoven, 1991; Argyle, 1999). Co nsequently, poor health, which limits an individuals ability to carry out their daily activities, reduces overall satisfaction. The literature about subjective well-being in Latin American countries is few and very recent. Graham and Pettinato (2001) were some of the first to analyze Latin American countries. Using the Latinobarà ³metro 2000, they found that Latin America is not all that different from the advanced industrial economies in relation to some of the determinants of happiness. Similar to the OECD countries, happiness has a quadratic relationship with age, initially decreasing and then increasing monotonically after 49 years of age. As in the industrial countries, being married had positive and significant effects. In contrast to the advanced economies, a significant gender effect was no found in Latin America. Also, as in the industrial countries, the coefficients for level of wealth were strong, positive, and significant in happiness. When wealth was included in the regressions, the coefficient for education level became insignificant or weakly significant, depending on the regression used. Bein g self-employed or unemployed both had significant and negative effects on happiness. When they included country-fixed effects, the coefficient on self-employment became insignificant. While being unemployed also has negative effects on happiness in the advanced industrial economies, being self-employed has positive effects. The most credible explanation is intuitive and it was given by the authors: most self-employed people in the latter are self-employed by choice, while in developing economies, many are self-employed due to the absence of more secure employment opportunities and live a precarious existence in the informal sector. Other analyses by countries have been conducted in Latin America. Among the most important, Rojas (2006b and 2007), using the domains-of-life approach in Mexico, found that people are on average, more satisfied in the family domain, while they are less satisfied in the consumption, personal and job domains. Rojas (2007) found that income is an explanatory variable of relevancy for the economic and labor satisfaction, but not for either family or leisure satisfaction. Due to that, he found a weak relationship between income and life satisfaction Gerstenbluth et al. (2007) studied the relationship between happiness and health in Argentina and Uruguay using the Latinobarà ³metro 2004. Cruz and Torres (2006), using the Encuesta de Calidad de Vida 2003, tested various happiness hypotheses among Colombians and Cid et al. (2008), using the survey called Salud, Bienestar y Envejecimiento en Amà ©rica Latina y el Caribe (SABE), explored the correlation between happiness and income in the el derly in Uruguay. To our knowledge, the previous studies conducted about Latin America have not included the effect of social capital on subjective well-being, and they have analyzed the self-employment as a homogeneous labor market status. However, when considering the specificity of the leisure domain, we should take into account that while satisfaction with other realms of life may lie upon the valuation of objective situations (such as one’s financial situation, health or housing conditions), satisfaction with leisure brings in an additional challenge as individual’s boundaries of leisure are defined by her perception of what is pleasant (Ateca-Amestoy et al., 2008). Conceptual discussion on the nature of leisure time in contemporary societies Time allocation decisions within the family: economic approaches and models. We will attach to the economic approach to human behavior by Becker (moreover, bring arguments such as those contained in a theory of social interactions). Temporal autonomy is a matter of having discretionary control over your time. Discretionary Time. A New Measure of Freedom (Goodin et al., 2005) Other approaches: we have found these relevant arguments: Veblens theory The omnivore Bourdieus distinction Putnams social capital 3.1. What is Social Capital? There is a traditional consensus that there exists three distincs traditions that conceptualize and analyze social capital. All three would be relevant for our reasoning. Pierre Bourdieu bourdieu2: who conceptualised social capital as the `actual or potential resources that an individual has at his/her disposal as a result of `a durable network of more or less institutionalised relationships of mutual acquaintance and recognition, i.e. membership in a group. Some authors point out that this definition must be viewed as part of his broader concern with developing the different types of capital in order to explain the means by which the social stratification system is preserved and the dominant class-reproduction strategy is legitimised. J.S. Coleman coleman defines it as the set of resources that inhere in family relations and in community social organisations and that are useful for the cognitive or social development of a child or young person. Social relations were viewed by Coleman to make up important `capital resources for individuals by means of processes such as setting `obligations, expectations and trustworthiness, creating channels for information, and setting norms backed by efficient sanctions. These resources may be influenced by factors such as generalised trustworthiness which ensures that obligations are met, the extent to which a person is in