The Economics of Sleep

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Economists term luxury good as one for which demand increases faster than the rare of increase in income. An “inferior good” by contrast is one where a typical consumer’s demand actually decreases with rising income. (For a normal good demand and income are proportional.)

Economics is the study of resource allocation under the condition of scarcity, and for many people, the scare resource is time. Either consciously or unconsciously, people make decisions about how to allocate their time, including time in bed and time working. A familiar chart on the walls of university students says “Sleep, work, play: pick two”

There’s no question that sleep disorders are a drag on the economy when it comes to lost productivity, work time, medical expenses, and bad moods. A study of people from 12 countries found that for each one-hour increase in “market work” (as opposed to, say, unpaid housework), sleep time was reduced by 10 minutes.

The number of hours the average person sleeps has declined over the past century, and while much of this is due to electrification of homes (with lights and televisions, etc), it is reasonable to think that part of it is due to the expansion of the market economy and specialization of labor.

Differences Between Demographic Groups

Wealthier people on average have lower sleep latency than poor people. They are more efficient sleepers, spending a greater portion of their time in bed asleep. Of course, these are averages and there is quite a bit of variation within groups.

Sleep efficiency also differed between men and women and between black and white people.

SleepAllWhite womenWhite menBlack womenBlack men
Time in bed7.517.847.347.557.10
Sleep latency (minutes)22.3313.3018.5228.3635.93
Sleep duration (hours)6.136.716.095.905.10
Sleep efficiency80.8%85.7%82.4%78.2%73.2%

(The above table from the University of Chicago website.)

Low socioeconomic status is associated with poor health, and a recent study showed that pediatric sleep apnea is more common in poor neighborhoods. University of Chicago researchers also found that higher income people tend to sleep more than lower income people. One conundrum is whether being poor makes you sleep worse or whether sleeping worse makes you poor. There is no clear answer here. There is of course a relationship between sleep and overall health, and between overall health and socioeconomic status. Sleep loss can increase the “allostatic load” and increase the risk of many chronic conditions, such as obesity, diabetes, and hypertension, which are more common among the poor.

Another study by Case Western Reserve University showed that low socioeconomic status is associated with “long sleep” (excessive sleep) and early mortality. (Separately it is known there is a connection between long sleep and early mortality.) Nobody knows the exact connection.

A recent University of Wisconsin study found a correlation between socioeconomic status and both subjective and objective sleep quality, although it was a fairly simple study and the authors hypothesized that the effect was due to overall health (richer people are healthier) and “psychosocial characteristics” (richer people have more friends).  The higher SES individuals tended to have substantially shorter sleep latencies and higher sleep efficiencies.

They also found that people with higher incomes tend to take longer to get to sleep, but are more efficient in their sleep (spend more time in Stages 3 and 4 and sleep less overall.)  Married people sleep better than single people and separated people sleep the worst.

Kids from lower SES groups also tend to have less efficient sleep than wealthier kids, and experts believe this partially explains the gap in academic performance.  A Rhode Island College study also found that higher SES adolescents had better discipline about getting to bed early on school nights.

The 2008-2010 National Health Interview Survey looked at sleep duration varied with income levels. Poorer people have a wider distribution; they more often sleep little and more often sleep long than other people. Numbers are percentages.

Income level6 hours or less sleep7 to 8 hours9 hours or more sleep
Below Poverty Level31.055.513.5
100% to 200% of Poverty Level30.058.012.0
200% to 400% of Poverty Level29.261.59.3
400% or more of Poverty Level26.567.26.3

Eduction levels show a similar pattern. Numbers are percentages.

Education level6 hours or less sleep7 to 8 hours9 hours or more sleep
Less than high school graduate28.256.914.9
High school graduate, but no college28.959.811.3
Bachelor’s degree, but not graduate degree25.568.75.8

Poorer people are also less likely to use CPAP machines when they have apnea. This may be due to concerns over cost or failure to seek treatment or to be aware of the problem of apnea.  More broadly there is more sleep-disordered breathing among lower socioeconomic status children than children from wealthier households, and more among black kids than white.

Among adults, multiracial people seem more likely to suffer sleep disturbances

A report by the National Bureau of Economic Research stated that economists found that higher employment (and lower unemployment) is correlated with an increase in heart disease. “A single percentage point reduction in unemployment increases predicted deaths from heart attack by about 1.3 percent.” Sleep deprivation was listed as a possible cause.

A very large survey from Cornell’s Institute for Health and Productivity Studies found that both young adults and old adults with insomnia spent over $1000 per year more on health costs than their sound-sleeping peers. Again, this could be because the insomnia is a symptom of other maladies rather than a primary malady in itself. A Pew Research Center study found that low income people are more likely to take daytime naps than those who make a lot of money. More on how much insomnia costs society.

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