Roland Fryer has a nice opinion piece in the WSJ about "The Economics of DIY." He points out that even wealthy people tend to do household chores that they could affordably outsource. He relates an incident:
When a friend invited me to play golf and I declined because the yard needed mowing, he didn’t hide his disbelief. “You can pay someone to cut your lawn,” he said, “but you can’t pay someone to have fun for you.”
At first blush, it seems as though the tenured Harvard economics professor mowing his own grass needs a refresher in cost-benefit analysis. But he points out that many of the benefits of DIY are often hidden and ill-defined while the costs are fixed and precise. Three economic concepts help to better understand some hidden benefits.
Diminishing Marginal Utility - The value of an activity falls as you do more. In his example, when time with his kids is short, he frees up time by outsourcing more - cooking, cleaning, ride-sharing, etc. The cost of the meal, the maid, or the ride is fully observable. The value of the time shared is less amenable to an accounting ledger.
Experiential Utility - There is often pride in doing. We value our ability to do things and we recognize these talents in others.We admire the craftsmanship in DIY car restoration, woodworking, quilting, or calligraphy. Hobbies can be fun. Moreover, there can be joy in seeing yourself improve. And the nostalgia of learning from an elder can bring back fond memories.
Signaling - Cutting the lawn sends a signal to your neighbors and yourself. You are the kind of person who takes care of things, who others can look on with admiration for the care you take. You provide positive externalities.
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