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.

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  1. 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)

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  2. Caliphilosopher says:

    Economists in that article are rational? On what grounds?

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  3. Quinton says:

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

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  4. 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.

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  5. tommystinson says:

    Economists are not humane.

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  6. 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.)

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  7. 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.

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  8. 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!

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