How much money is a point on Less Wrong worth to you?
That’s perhaps a generalization of the question, “how much is an hour of your time worth to you”, that was once brought up on Marginal Revolution. Not an easy question to answer.
I bought the book “Your Money or Your Life” on a friend’s recommendation, in good part to figure out how I answer that question. It goes into some of the complications like figuring out the real “total cost of ownership” of your job—this blog gives a nice brief illustration of the kind of thinking the book encourages. I haven’t really figured it out yet, but just thinking through the issues turns out to be valuable.
I’ve been toying with the idea of a post which illustrates on a smaller scale example the notion of applying “shut up and multiply” to some biggish life decisions, reporting on how my wife & I decided to no longer own a car after we figured out that the car was costing us around 10€ each day that we left it sitting in the garage, and that was a vast majority of the days in each year. No-one around us in similar situations seems to question that having a car is the “normal” choice.
“How much is this really worth” or “how much does this really cost” is an interesting question, one you can’t always answer with full precision, but the attempt is often in itself instructive and wortwhile. An hour or two spent on back-of-the-envelope calculations, maybe even a little Excel spreadsheet, can be a great way to identify less-than-fully-rational decisions you’re making just by not thinking about them.
Morendil, my guess is that you don’t question whether having a car is the “normal” choice, either, but you have started to question whether it’s the efficient choice. Most people don’t evaluate the economic efficiency of owning a car precisely because everyone agrees that it’s normal to own a car, and people often just do what they see as normal without stopping to think about it.
Incidentally, zipcar.com, an hourly car rental service, sometimes runs ads that break down the cost of using a Zipcar for your driving needs on an annual basis vs. the cost of owning a car. I checked the math on one of those ads and found it persuasive; I’ve been using Zipcar for 3 years now and have never felt the need to own a car.
That’s perhaps a generalization of the question, “how much is an hour of your time worth to you”, that was once brought up on Marginal Revolution. Not an easy question to answer.
I bought the book “Your Money or Your Life” on a friend’s recommendation, in good part to figure out how I answer that question. It goes into some of the complications like figuring out the real “total cost of ownership” of your job—this blog gives a nice brief illustration of the kind of thinking the book encourages. I haven’t really figured it out yet, but just thinking through the issues turns out to be valuable.
I’ve been toying with the idea of a post which illustrates on a smaller scale example the notion of applying “shut up and multiply” to some biggish life decisions, reporting on how my wife & I decided to no longer own a car after we figured out that the car was costing us around 10€ each day that we left it sitting in the garage, and that was a vast majority of the days in each year. No-one around us in similar situations seems to question that having a car is the “normal” choice.
“How much is this really worth” or “how much does this really cost” is an interesting question, one you can’t always answer with full precision, but the attempt is often in itself instructive and wortwhile. An hour or two spent on back-of-the-envelope calculations, maybe even a little Excel spreadsheet, can be a great way to identify less-than-fully-rational decisions you’re making just by not thinking about them.
Morendil, my guess is that you don’t question whether having a car is the “normal” choice, either, but you have started to question whether it’s the efficient choice. Most people don’t evaluate the economic efficiency of owning a car precisely because everyone agrees that it’s normal to own a car, and people often just do what they see as normal without stopping to think about it.
Incidentally, zipcar.com, an hourly car rental service, sometimes runs ads that break down the cost of using a Zipcar for your driving needs on an annual basis vs. the cost of owning a car. I checked the math on one of those ads and found it persuasive; I’ve been using Zipcar for 3 years now and have never felt the need to own a car.