Interesting but the "savings" are minimal if you account for someone's time. A billion pounds of pasta taking an extra 6 minutes to prepare is 600 million hours, right? For a savings of $20 million a year?
I'm always suspicious of analyses like that. Most people's earnings aren't that granular. If I make $X/hour, I don't automatically get $X/10 if you save me 6 minutes in the kitchen. Even if I do bill by the hour, it's practically impossible to bill for 6 minutes. Now consider that fact that many (most?) people don't even get paid by the hour, but by the week/month.
For me, the marginal income from an extra 6 minutes of time is zero.
No, the marginal income (in dollars) is the smallest amount of dollars that you'd take to work for someone else for those 6 minutes.
Said differently, if I'd offer you six bucks at dinner time to give up cooking and work for me and you'd say no, then your time must be worth at least six dollars, or $1/min, otherwise you'd have done it.
Since it's a nice, clean, hypothetical we get to ignore things like the silliness of working for only 6 minutes, or the time it takes to leave your kitchen.
How you actually get paid is irrelevant, the question is 'How much would you have to pay me right now to stop doing this and work.' That's the value of your time, because in an open economy, you could go work instead (subject to the caveats above). =)
Usually the question is asked in terms of what work you'd get paid most doing (which is often work you enjoy).
Even If I get paid $10MM/yr in one lump sum from a trust fund, the value of my time per minute is still however much money I'd take in lieu of my time, or, in economic parlance, the 'second best alternative'.
Just because you can't practically bill for a fraction of your time doesn't make it value-less. That's a common fallacy, and (imho) a wasteful way to look at life.
In this case, I'd argue that in light of what you said above that I would have to pay you a LOT to get you to quit cooking and go do work, so the value of that chunk of time is actually quite high.
Good points. Theoretically, you're right, but I don't think it works that way practically. I'm not saying that my time is valueless. I'm just saying that while I value it, there is no efficient way for anyone to compensate me for 6 minutes of my free time. There are too many fixed costs associated with employing someone for that person to get paid the true marginal value of their time.
"No, the marginal income (in dollars) is the smallest amount of dollars that you'd take to work for someone else for those 6 minutes."
Theoretically, yes. But try to find someone who will employ you for just 6 minutes. There's not that much liquidity in the job market (yet?).
I just wanted to make that point because I believe many people (although perhaps not many hacker news types) are likely to waste their time because (from a cold, unfeeling economics nerd perspective) we tend to undervalue it.
Blowing 4 hours on the tube on for a CSI marathon becomes a lot less likely when you think of it as spending two-hundred bucks to be slightly entertained.
It's an unhealthy way to make every decision, but still a bit underused in my opinion.
Environmental costs are very clearly not computed very efficiently in our current market. Instead, they're external costs that get passed on to the public as a whole while the individual incurring them benefits. Maybe it's not worth cooking pasta in this way, but the dollar value you assigned misses all the externalities involved.
