Utility vs. Price: Southern France or Jersey Shore?

I got an invitation to give a keynote address at a conference in southern France next June. A great conference, but I had to decline, since we’ve planned a week with the extended family on the New Jersey Shore (the only week we are all available). The man who invited me said,“… southern France would not have been a bad place to spend this holiday….” 

Even though we love the Jersey Shore, he’s right—the relative utility from the French week would be higher; and if the relative price were one, we’d be off to France. However, the prices aren’t equal—it would cost over $1,000 extra for each of 12 people to do the French week.  Too bad—we’ll stick with the New Jersey week, a sensible and still very enjoyable economic decision in the face of income, price and time-constrained optimization. 

(HT to NG)


Ivan

Jersey Shore in November??

Ivan

Nevermind, didnt see that it was for next June. Still, I wasnt aware that anyone outside the Tri-state area was interested in vacationing on the Jersey shore

James

Plus you have to factor in the - I guess you'd call it an avoided negative cost? - of not having to go through airport security, sit on a plane for hours, experience jet lag, etc.

Joe Dokes

And there's no negative cost to going to New Jersey?

The real cost of choosing France is irritating his relatives. How many years would he have to hear, "Remember the year Daniel ditched us to go to France?"

Personally I'd throw my dysfunctional family under the proverbial bus to go to France. Perhaps this last statement explains to some degree my families dysfunction.

Regards,

Joe Dokes

James

"And there’s no negative cost to going to New Jersey?"

I don't know: where would he be going to New Jersey from? Could be just a short drive...

Mark D.

What is the phrase that comes to mind when talking of economists; "One who knows the price of everything and the value of nothing?"

Mike Lemmer

It depends whether you value a vacation in France or a vacation with all of your extended family more. They've all committed to a Jersey Shore vacation, but a few might drop out of a French vacation either due to extra cost or simply not wanting to travel to France.

Kei

If the sum of utility from the French week is higher than $1000 extra cost of 12 people, will you go to Southern France?

Basil White

When I completed paying my debt consolidation loan, the loaner sent me a book on staying out of debt that contained a purchasing method that I use today. Je partage maintenant avec vous, mes collègues freakonomistes.

Say I wanna buy a DVD player, and it costs $110. I imagine the sales rep holding the DVD player in one hand and $110 in the other, and asking me to choose. This choice minimizes buyer's regret, because I often choose the money.

So, altering this method for the above scenario, the travel agent holds Southern France in one hand, and Jersey Shore+$1,000 in the other. Une décision facile, non?

Eva

It also points to an interesting problem: What if your utility derived from the week in France (net of all those "negative utility" costs mentioned) were higher than the week in Jersey + $1,000, but your budget constrait prevented you from exercising that option? IMO, mainstream economics focusses too much on willingness to pay as opposed to ability to pay.

Basil White

Kinda like choosing between medical bankruptcy or death! Gripe all you want about single-payer, zero people in the EU file for medical bankruptcy.