Time Zones as Cues for Coordination: Latitude, Longitude, and Letterman

Abstract

Market productivity is often greater, and leisure and other household activities more enjoyable, when people perform them simultaneously. Beyond pointing out the positive externalities of synchronicity, economists have not attempted to identify exogenous determinants of timing. We develop a theory illustrating conditions under which synchronicity will vary and identify three factors %u2014 the amount of daylight, the timing of television programming, and differences in time zones %u2014 that can alter timing. Using the American Time Use Survey for 2003 and 2004, we first show that an exogenous shock to time in one area due to non-adherence to daylight-saving time leads its residents to alter their work schedules to continue coordinating their activities with those of people elsewhere. With time use data from Australia, we also demonstrate the same response to a similar shock there. We then show that both television timing and the benefits of coordinating across time zones in the U.S. generally affect the timing of market work and sleep, the two most time-consuming activities people undertake. While these impacts do not differ greatly by people's demographic characteristics, workers in industries where we would expect more coordination outside of their local areas are more responsive to the effects of time zones.

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Time Zones As Cues For Coordination:
Latitude, Longitude, And Letterman

By


Daniel S. Hamermesh
Caitlin Knowles Myers
Mark L. Pocock


July 2006





MIDDLEBURY COLLEGE ECONOMICS DISCUSSION PAPER NO. 06-09








DEPARTMENT OF ECONOMICS
MIDDLEBURY COLLEGE
MIDDLEBURY, VERMONT 05753

http://www.middlebury.edu/~econ

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NBER WORKING PAPER SERIES
TIME ZONES AS CUES FOR COORDINATION:
LATITUDE, LONGITUDE, AND LETTERMAN
Daniel S. Hamermesh
Caitlin Knowles Myers
Mark L. Pocock
Working Paper 12350
http://www.nber.org/papers/w12350
NATIONAL BUREAU OF ECONOMIC RESEARCH
1050 Massachusetts Avenue
Cambridge, MA 02138
June 2006
Hamermesh: Centennial professor, University of Texas at Austin and research associate, NBER and IZA;
Myers: Assistant Professor, Middlebury College and research fellow, IZA; Pocock: Financial Economist,
Office of Comptroller of the Currency. We thank Isaac Ehrlich, Michael Kackman, Peter Matthews, Gerard
Pfann, and participants in seminars at several universities for helpful comments, and Rick Evans for his
highly competent research assistance. The views expressed herein are those of the author(s) and do not
necessarily reflect the views of the National Bureau of Economic Research.
©2006 by Daniel S. Hamermesh, Caitlin Knowles Myers and Mark L. Pocock. All rights reserved. Short
sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full
credit, including © notice, is given to the source.

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Time Zones as Cues for Coordination: Latitude, Longitude, and Letterman
Daniel S. Hamermesh, Caitlin Knowles Myers and Mark L. Pocock
NBER Working Paper No. 12350
June 2006
JEL No. J22, D13
ABSTRACT
Market productivity is often greater, and leisure and other household activities more enjoyable, when
people perform them simultaneously. Beyond pointing out the positive externalities of synchronicity,
economists have not attempted to identify exogenous determinants of timing. We develop a theory
illustrating conditions under which synchronicity will vary and identify three factors — the amount
of daylight, the timing of television programming, and differences in time zones — that can alter
timing. Using the American Time Use Survey for 2003 and 2004, we first show that an exogenous
shock to time in one area due to non-adherence to daylight-saving time leads its residents to alter
their work schedules to continue coordinating their activities with those of people elsewhere. With
time use data from Australia, we also demonstrate the same response to a similar shock there. We
then show that both television timing and the benefits of coordinating across time zones in the U.S.
generally affect the timing of market work and sleep, the two most time-consuming activities people
undertake. While these impacts do not differ greatly by people's demographic characteristics,
workers in industries where we would expect more coordination outside of their local areas are more
responsive to the effects of time zones.
Daniel S. Hamermesh
Department of Economics
University of Texas
Austin, TX 78712-1173
and NBER
hamermes@eco.utexas.edu
Caitlin Knowles Myers
Department of Economics
Middlebury College
Middlebury, VT 05753
cmyers@middlebury.edu
Mark L. Pocock
Office of Comptroller of the Currency
Department of Treasury
Washington, DC
mark.pocock@occ.treas.gov

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1Introduction
Coordination is central to economic behavior. The production of goods and services typically
requires the services of complementary inputs, including the services of workers of different
types. Firms often cooperate with others in order to maximize their joint profits. Generating
satisfaction in the household requires purchasing goods and using one’s own time and rented
services of others to create a commodity that yields utility (Becker, 1965). Coordination
also underlies policies as policymakers must take into account the interdependence of their
choices. The study of these various types of coordination of the amounts of consumer goods
and producer inputs has formed the basis for much of microeconomic theory, and testing
them and inferring the values of the parameters describing parts of the theories has occupied
a substantial proportion of empirical economists’ time for at least half a century.
That every activity implicitly must have a time subscript has entered theoretical analyses
only rarely (but see the excellent exception in Winston, 1982). Using capital services alone
from midnight to noon and labor services alone from noon to midnight will lead to much less
(zero?) output than if both are utilized in the same twelve hours of the day; and production
will probably be higher if workers of different types are on the job at the same time than
if each one works at different times. Firms that cooperate do so in a time dimension, and
the extent of the temporal coordination has macroeconomic impacts (Cooper, 1999). For
most people the services of an automobile are more valuable if they are combined with the
simultaneous inputs of drivers’ and passengers’ time when the auto is on hand, and the
utility gained by the people involved is usually higher if enjoyed simultaneously.
When activities take place matters, as does the extent of temporal coordination in gener-
ating them. Despite the importance of when cooperating agents engage in various activities,
there has been remarkably little empirical study of the temporal nature of activities and even
less of temporal patterns of coordination. Cooper and Haltiwanger (1993) demonstrated how
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government policies can induce firms to undertake decisions about product design at the same
time. Hamermesh (2002) and Hallberg (2003) showed that spouses prefer to work (and en-
gage in household production) at the same times of the day, and that such coordination is a
superior activity. Jenkins and Osberg (2005) demonstrated how an increase in the fraction
of people in a region who engage in a particular leisure activity has positive ceteris paribus
impacts on individuals’ choices of leisure activities.
Very little other empirical study of the timing of coordination appears to have been
done. Perhaps part of the reason is that while it is clear that people’s synchronization
of their work activities is important (Weiss, 1996), as is their coordination in timing their
non-market activities, it is very difficult to identify factors that might cause the extent of
synchronization to differ among different groups of workers and consumers. In this study we
do exactly that: we identify several determinants of temporal coordination that are clearly
external to the agents making the decisions to coordinate. We thus show that the degree
of synchronization does not just happen, but that it results from the gains to coordination
of activities. Temporal coordination can also can be affected by cues, both natural and
artificial. The artificial cue we examine here is the timing of television programs, while the
natural cue is circadian rhythm as modified by daylight (Wever, 1982). We also examine the
importance of coordination that is induced by the gains to simultaneous production across
geographic areas where the nominal time of day differs. We refer to these as light, television,
and time zone cues, respectively.
In the next section we develop a simple model that allows us to illustrate some trade-
offs involved in temporal coordination and to identify instances where we might expect cues
for coordination to be more or less powerful. In Section 3 we describe the nature of the
institutions that generate these cues, while in Section 4 we present the data used to analyze
their importance. Section 5 offers the central results of the paper, both the results of a
natural experiment that demonstrates the empirical importance of time zone cues and the
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