How Do Students Allocate Their Time? An Application of Prospect Theory to Trade‐offs between Time Spent to Improve GPA Versus Time Spent on Other Activities

Abstract: We employ a choice experiment survey to elicit university students’ preferences for grade point average (GPA) relative to time spent on various activities. Using expected utility and prospect theory approaches to analyze those preferences, we find statistically significant asymmetry between the desire to increase GPA and the desire to avoid a decrease in GPA. Surveyed students were loss averse regarding GPA: they would trade approximately 4.6 times as much free time to avoid losing a point in their semester GPA relative to time they are willing to give up to gain one additional point. This study contributes to the growing research regarding prospect theory by analyzing loss aversion in a novel context of students’ time allocation.