Are Economists Cheap? Or Do We Just Believe in Comparative Advantage?

The front page of Saturday’s Wall Street Journal tells us that “Economists are cheapskates.” The article by Justin Lahart is hilarious, recounting the foibles of those of us who sometimes take our classroom lessons about economizing a step too far — particularly when it comes to economizing on time.

I laughed particularly hard when I read this:

Stanford University economist Robert Hall, incoming president of the American Economic Association, values his time so highly that his wife, economist Susan Woodward, occasionally puts her foot down. “Bob doesn’t see why we can’t just hire people to trim the Christmas tree,” she says. “I tell him that’s not what it’s supposed to be about.”

I sent Bob a quick email to tell him that I’m on his side on this one. But he was having none of my solidarity — he reckons the Journal owes him a correction. In fact, he even told me what he hoped for:

Economist Robert E. Hall has never sought hired help to trim the tree. He has never even considered the idea. This year, he did the whole job himself, beautifully, with no help from his relatives or friends. The WSJ‘s report that he wanted hired help was based on erroneous information provided by Susan E. Woodward.

Even if Bob is not guilty this year, I still reckon he’s probably guilty, at least in his heart. Perhaps he just thought it and didn’t say it; perhaps he was guilty last year; or perhaps he’s been guilty of related sins in the past.

Why am I so confident? It’s just how economists think. Alan Blinder has said that he wouldn’t trust an economist who mowed his own lawn, because it reveals that they don’t believe deeply in the principle of comparative advantage. And what goes for mowing your lawn surely holds equally for trimming the tree.

Perhaps not. Ed Glaser has recently argued that we economists should stop being so Grinch-like. Ed reminds us that some traditions are more about meaning than deadweight loss triangles.

O.K., time to ‘fess up. I laughed about Bob Hall’s alleged Christmas request because I really did ask Betsey if we could hire someone to trim our tree for us. Yes, I do believe in comparative advantage, and I figure that I’m more efficient at other things. But she’s a step smarter than my simplistic analysis, and at her insistence, we not only trimmed the tree, but we also enjoyed it (and indeed, we enjoyed it more than the next-best use of our time, leading to the conclusion that I have a comparative advantage at tree trimming).

Of course, when it comes to dismantling the tree, there’s no special meaning attached. And so, following these same principles of comparative advantage, Betsey and I have hired someone to strip the tree. The time we saved meant that we could spend more time in Atlanta, enjoying the very same meetings of the American Economic Association that Bob Hall did such a splendid job organizing. A feat even more impressive, in light of his onerous Yuletide burdens.

Leave A Comment

Comments are moderated and generally will be posted if they are on-topic and not abusive.

 

COMMENTS: 33


  1. Mo says:

    I’m surprised most economists wouldn’t just go for the fake, pre-lighted trees that are now available. They look much better than 20 years ago and take little time to set up. Plus, the price has fallen substantially. I’d imagine the payback period is two years (especially if you are hiring someone). Your hedonic value for a real tree is extremely high perhaps?

    I see this as a time-saving, technological advancement that many (though apparently not other economists, besides myself) have adopted. The time benefits (e.g. setup, cleanup of needles, etc.) outweigh the loss of not having a real tree (e.g. smell, status signaling) in my opinion.

    Thumb up 0 Thumb down 0
  2. Nosybear says:

    Interesting that in discussing mowing the yard, no one brings up the added value of the exercise (assuming one pushes the mower rather than merely riding it). Economist do exercise, don’t you?

    Thumb up 0 Thumb down 0
  3. Manuel Vasquez says:

    I read the article this weekend and told my wife, “See, this is why economists will never run the country and why we should be happy about it. Now if only lawyers would adopt dislike-able, credibility destroying habits, we’d be fine.”

    Thumb up 0 Thumb down 1
  4. Doug B says:

    Have you seen how much landscaping companies charge for mowing these days?

    Mowing your own lawn also has the exercise benefit (If it’s a push mower). How frequently can going for a walk save you money?

    Thumb up 0 Thumb down 0
  5. Mike B says:

    Just because some lawn mowing professional has a comparative advantage, doesn’t mean that its rational not to mow your own lawn. An economist may have little opportunity cost in taking the hour to mow their lawn and therefore is “earning” what they would have otherwise spent and utilizing what would have been wasted time. Also lawn mowing may provide time for the economist to think their big economist thoughts, which also eliminated the opportunity cost.

    Thumb up 0 Thumb down 0
  6. MattW says:

    Why not trust an economist who mows their own lawn? Maybe the exercise, sun, and misc other benefits they get from it is more than what they might get from doing an additional regression. Marginal utility, perhaps? Same goes for almost everything.

    Thumb up 0 Thumb down 0
  7. Robert says:

    I don’t think economists are cheap… just rational. If you don’t have the comparative advantage in something why would you do it if someone can do it faster, better, and more efficiently? You could spend the time gained doing something that actually appeals to you.

    Thumb up 0 Thumb down 0
  8. David L says:

    I just thought most economists would be Jewish. Our only holiday decor requirement is a menorah and a $5 box of candles.

    Plus, every few years, Chanukah extends later than Christmas, so you get to capitalize on all the sales to get your gifts!

    Thumb up 0 Thumb down 0
  9. Brenton says:

    Economists use Occam’s Nuclear Bomb to disregard possibilities like the psychological effects of actually directly helping someone. It’s similar to giving a person money for a gift, when you could have made or picked out a nice gift for them. Research on game theory found that only economists and sociopaths behaved exactly like the rational models expected. (“So Long Sucker” by John Nash)

    Thumb up 0 Thumb down 0
  10. Caliphilosopher says:

    Economists in that article are rational? On what grounds?

    Thumb up 0 Thumb down 0
  11. Quinton says:

    I think you probably have a comparative advantage in spending time with your wife, not tree trimming.

    Thumb up 0 Thumb down 0
  12. gevin shaw says:

    Humans understand that there is an emotional, non-economic factor involved in things like trimming a tree or giving gifts or getting a nicer hotel room. We have a word for people who don’t: psychopath.

    Thumb up 0 Thumb down 0
  13. tommystinson says:

    Economists are not humane.

    Thumb up 0 Thumb down 0
  14. Christopher Strom says:

    While we like having the house decorated for Christmas, neither I nor my wife has much desire to spend a lot of time on the task. Being frugal, hiring the job was dismissed as a silly use for money, so my wife suggested that not only was a pre-lit tree in order, but we should leave it decorated, too.

    We got one small enough to both fit inside a large trash bag (to protect it from dust) and stand up in the attic. It is decorated beautifully, and set up requires approximately three minutes.

    This arrangement leaves us more time to enjoy each other’s comparative advantages…

    (It should be noted that although my wife and I are not, in fact, economists, we are possibly the next most practical sorts of people – engineers.)

    Thumb up 0 Thumb down 0
  15. Joel Upchurch says:

    I found the solution to the Christmas tree problem years ago. Christmas trees are only a time sink if you take them down. My Christmas tree has been up for over three years now.

    I seldom use the living room, so it isn’t in the way.

    Thumb up 0 Thumb down 0
  16. Kevin H says:

    but would you trust an economist that pays both to have someone mow their lawn AND a gym membership. Especially if you use a manual mower, seems like a huge inefficiency to me!

    Thumb up 0 Thumb down 0
  17. arnebjarne says:

    My solution is the simplest one: I do not have a christmas tree, have not had since I was a child. It is not a question of beeing an economist (maybe just a little…) but that I would rather spend time with the wife doing something we both care about more than killing innocent trees for the purpose of getting more to vacume later.

    @gevin: your use of the label psychopath is not only wrong, but 100% unrelated to the problem discussed here.

    A real psychopath would understand the emotional factor, and use it to his benefit.

    Thumb up 0 Thumb down 0
  18. Cory says:

    My wife and I followed the adivce on taking down the tree this year. She did it while I was working a long day at the job.

    Thumb up 0 Thumb down 0
  19. Mike says:

    @11
    Whose to say you aren’t spending that time with your wife elsewhere?

    Thumb up 0 Thumb down 0
  20. Davis X. Machina says:

    “Economist do exercise, don’t you?”

    Unless it’s really hard, the exercise is usually left to the reader.

    Thumb up 1 Thumb down 0
  21. Rodney says:

    I’m an economist. What is this “lawn” thing of which you speak?

    Thumb up 0 Thumb down 0
  22. Lindsey says:

    Thank you 15, 20, 21! Finally some humor for a humorous post! :))

    Thumb up 0 Thumb down 0
  23. Keith Ackermann says:

    I couldn’t hack taking my tree down.

    There was an ape watching me through my window, and he was taking notes. I become very self-conscious and insecure when they do that.

    Thumb up 0 Thumb down 0
  24. Jake says:

    17: “A real psychopath would understand the emotional factor, and use it to his benefit.”

    Your last name wouldn’t happen to be Schrute, would it?

    Thumb up 0 Thumb down 0
  25. Mike M says:

    I’ve never heard of anyone trimming their Christmas tree before. Just pick one out that looks good and appreciate it for how nature created it.

    Thumb up 0 Thumb down 0
  26. ktb says:

    @12, I’m with 17, you’re offbase here. Psychopaths tend to lack empathy for others, and don’t tend to feel remorse for hurting others. That doesn’t mean they don’t have any emotions or that they always behave rationally. In particular it doesn’t necessarily have any bearing on their tendency to value their ownmoney over their own comfort or time.

    Thumb up 0 Thumb down 0
  27. Ryan Cagey says:

    I suppose, as a die-hard economist, that if I truly believed in comparative advantage, I would higher a male prostitute to satisfy my wife.

    Thumb up 0 Thumb down 0
  28. Vusi says:

    My dad is an economist who mows his own lawn. He’s just a better lawn mower than an economist.

    Thumb up 1 Thumb down 0
  29. Bobby G says:

    @ Brenton (#9),

    So… take it you haven’t read SuperFreakonomics yet?

    Thumb up 0 Thumb down 0
  30. gvg says:

    I love the comparative advantage idea. I have simply been “out sourcing” all my duties as an up scale housewife all these years. Though the Christmas tree is always a small party thing, get the children to do the work for “fun.”

    I am sure my husband can see the comparative advantage of his Stanford educated wife doing something other than house chores. There is always a higher and better use of my time.

    lol

    Thumb up 0 Thumb down 0
    • Frederic Mari says:

      You say this as if it was news.

      Maybe the US has something against hired help (I doubt it but…) but my own calculations are that, as soon as you earned above minimum wage, it’s a pretty good idea to get someone else to do the lion share of the household chores – Say, get someone to clean your abode 2 times a week for half-a-day. Personally, I think Mondays and Thursdays are particularly good.

      The cost is more than repaid by how happy the wife will be. And, since what’s left is fairly small/easy stuff, it is really simple to do at least half of it, to yet more happiness for the wife.

      And a happy wife is very very very important to a husband’s happiness…

      Thumb up 0 Thumb down 0
  31. JP says:

    As an economist who attended the AEA conference looking for a job, I am not astounded by other economists who take their models too seriously.

    Dr. Wolfers, Dr. Blinder, and Dr. Hall all seem to forget the Axiom of Revealed Preference. That is, if you observe me doing A vs. B then it is because I prefer doing A vs. B. Whether it is mowing a lawn or trimming a Christmas tree, independent of what my “competitive advantage” is, if I have chosen to do that activity it is because that is the activity I prefer most out of all alternatives. At what point did economics become a prescription to others on how they should make choices?

    Thumb up 0 Thumb down 0
  32. Frederic Mari says:

    You enjoy tree trimming with your wife more than love making with your wife?

    Tsk.

    I suspect we’re reaching the point where you do NOT want to use comparative advantage to justify your choice… :)

    Thumb up 0 Thumb down 0