I’m Not Cheap Enough for a Six-Hour Laundry Session
One of the most profound ideas in economics is household production: the idea that people can choose how to do things by combining their time and their purchases — and then utilize substitution depending on the prices of each.
There is more than one way to take a vacation: it can be short and expensive (by air to Provence) or long and cheap (by camper to a nearby lake).
I don’t often think about these decisions in my own life, but doing the laundry in our apartment in Germany made them starkly clear.
The washer-dryer combo in our bathroom is tiny:
Worse still, it is very slow — to the point where completely doing three loads takes about six hours of intermittent attention; that’s a lot of time, but the only cost is soap.
Fortunately there is a laundry with lots of dryers and washers 20 yards down the street. I figure my wife and I can make three short trips in an hour and a half and get the whole task done for 10 euros ($15). It’s an easy choice: we substitute money for our time.
We are not often presented with such clear choices, and I do believe most people get it right (value their time properly) most of the time; but I’d bet that there still is a tendency to take a time-intensive approach (like our six-hour laundry) more often than is justified by the prices of purchases and time.