How Much do You Pay Your Machines?

Greetings, Robot Lords.

The Pitch

How much do you value your free time? In Stephen King's The Stand, the Walkin' Dude comes by Mother Abigail's place in the guise of a vacuum cleaner salesman, making the pitch that he's not actually selling her labor-saving vacuum cleaners. Instead, he's selling her cool lemonade sipped in the shade on a hot day, time to lazily read a novel, or time to do essentially whatever Mother Abigail likes best. The premise is simple and appealing: we buy (or make) machines which save us drudgery, and then allegedly have more free time.

The Catch

In reality, our time-savers often end up owning us instead. It takes a lot of time, energy and money to maintain every piece of equipment we buy. On the other hand, I have a lot more free time than any subsistence farmer I've heard about, so there must be a good side to this tech too. How do we know if a given piece of labor-saving tech is worthwhile?

The Players' Salaries

One interesting analysis is to figure out what effective wage you're paying your labor saving device for your extra free time. Everything doesn't always boil down to money: it's not as if chores are equally onerous (I enjoy gardening more than cleaning the bathroom), but quantifying the hourly rate of free-time-saving makes for an interesting analysis nonetheless. Here's a summary table, then I'm going to talk a little more about some entries. Here "machine wage" isn't how much you pay per hour of operation - it's how much you pay per every hour of labor it saves you. I've ordered this list in descending order of utility.

Item	Price	Cost/y	Lifetime (y)	Hours saved/week	Hours saved	Total Cost	Machine Wage
Dishwasher	500		5	3	780	500	0.64
Non-stick fry pan	100		20	0.05	52	100	1.92
Lawnmower (electric)	400	1	10	0.25	130	410	3.15
Newer computer	1500		2	1	104	1500	14.42
Kitchen Mixer	200	1	20	0.0096	10	220	22
Melon baller	10		10	0.00064	0.33	10	30
Car	5000	2000	5	1	260	15000	57.69

• I'm a dishwasher evangelist. I've been responsible for (or at least influential in) the decisions of no fewer than 5 households I know to acquire a dishwasher by hook or by crook. (If you're renting, look into portable dishwashers - that's what I own.) Until today I just always had a hunch that dishwashers were good time-savers, but the hard numbers really nail it for me. Operating a dishwasher (in hot water and dish soap) costs about the same as washing by hand, and by my analysis my $500 dishwasher will save me 780 hours of scrubbing. Since I value my free time more than 64¢/hour, owning a dishwasher is a no-brainer.
• I just bought a $100 super-high-quality frying pan, with (I kid you not) embedded diamonds as the non-stick coating. So far I have no complaints performance-wise: I get an even heat and the food has been scrumptious every time. As a side effect, I estimate that I spend about 3 minutes per week less cleaning, since now I can use this pan instead of my older stainless steel pan (which was a pain to scrub). Those 3 minutes per week over the 20 years the pan should last amount to 52 total hours saved, so I'm "paying" this machine $1.92/hour for the privilege of not washing dishes.
  
• If I were to buy a new computer (something I dream about way too often) I might spend about 1 hour less per week waiting for my numbers to crunch (I'm a "power user": I run intensive numerical operations on a regular basis; for word-processing I doubt a newer computer would save more than a minute or two per week). If the new computer I'd keep for about 2 years, then it would save me about 104 total hours, so upgrading now (for $1500) would be like paying the machine $14.42 for every hour I save not waiting for that progress bar to end.
• I broke down and bought one of those designer kitchen mix machines the other year. We barely use it, truth be told. If it were to save 15 minutes twice a year, this $200 machine would save us 10 hours of work over its 20-year lifetime. (Inside, I doubt it will save that much time, but the truth hurts sometimes.) It really sucks power too, so I guess its lifetime cost (price + power) will be $220; meaning we're paying it $22 per hour that it saves us. (Note: this mixer brings an invaluable quantity of ancillary joy to my better half merely by gracing our kitchen - which is precisely why this kind of analysis didn't have the last word.)
• We also own a melon baller! If it saves us 2 minutes a year (we hardly use it), we're paying it $30/hour for the privilege. Maybe single-purpose kitchen gadgets should be contraband.
  
• Last (but not least) we don't own a car. I can get to and from work without one (and, considering the parking around where I work, biking is faster), even though it makes doing errands a little more tricky. I estimate I spend about 1 hour more per week doing errands because I can't just hop into a rust bucket. (Aside: if I were to offset time I don't have to spend in the gym because I bike, this 1-hour figure could very well be negative!) In any case, were I to buy a car, over 5 years it could well cost $15,000 in insurance, depreciation, maintenance, parking and fuel. For each of the 260 hours it would save me, I'd be paying it $57.69: a pretty lousy deal. I guess I won't be buying a car until my lifestyle requires one.

The Last Inning

On that note, let me hand it over to you. The numbers I've presented are highly personalized and might not apply to you. I do a lot of serious computing, and even for me a new computer only barely makes sense. I live close to work, so biking is a great option. We do a lot of entertaining, and thus a dishwasher is pretty much essential. If you truly need a car, or if you don't entertain or run scientific computing experiments your personal table is likely to be quite different. Still, I encourage you to do the same sorts of analyses before listenening to the Walkin' Dude.

Rule your 'bots with an iron fist!

LeDopore

"-", not "/": In Search of Luxury on the Cheap

Greetings, lotus eaters.

It's been a long time since I've done a post! Let's start this one with some raw data.

Item	Egg	Chocolate	Cheese	Wine	Car /day
Cheap Price/Serving ($)	.15	1	1	3	10
Expensive Price/Serving ($)	.85	5	7	20	60

Today's post is about how to achieve luxury on the cheap. Some people would approach this subject by talking about secret bargain-hunting techniques: how to obtain the latest and greatest without paying through the nose. However, an often ignored avenue to getting a taste of the "good" life is to spend the money where it counts the most. Something that's worked for me is to start using more of the "-" sign on my mental calculator and less of the "/" sign. Let me give an example to explain what I mean.

Eggsample

Let's talk egg selection. My local supermarkets sell eggs for as little as 79¢ a dozen. These eggs are of decent quality in that they're not risky to your health but, since they're made with such narrow profit margins, every choice the farmer makes has to maximize quantity, not quality.

In the same supermarkets it's possible to buy artisanal eggs for about $5 a dozen. Nestled in post-consumer-recycled cardboard carton packaging on which is printed (in natural, organically-farmed vegetable-based dyes) idyllic odes to the chicken pastoral ideal, these poultry-gems might not quite live up to their billing. However, in this humble blogger's opinion a free range egg is a cut above a factory-farmed egg.

Where Classical Economics Fail

The consumer is left with the following dilemma: should she buy eggs which are six times as expensive, even if they taste better? In an ECON 101 class, the critical question would be "do I enjoy the expensive eggs six times as much?". Since I'd derive less than six times the pleasure from a free-range egg meal than from a factory farmed meal, classical economics says that my utility-to-cost ratio is higher for the cheap eggs, so I should buy those. Many shoppers I see have an ECON 101 attitude as well: they eschew the good eggs because they cost a whopping 6 times as much as utility-grade eggs.

Classical economics however fails as soon as one realizes demand for breakfast is woefully inelastic. In fact, my demand for eggs is met after spending such a minuscule fraction of my capital acquiring them that neglecting the inelasticity of my appetite is absurd. Assuming you have about 2 eggs per serving, the extra cost of having free-range eggs is only 70¢. Is it worth a 70¢ premium to have superior-quality eggs? Absolutely! And yet in the supermarkets I see shoppers clamoring for the best bargain eggs. Why are people being so cheap?

Using the "-" Sign

The root of the problem is the division operator. People balk at the idea of spending six times more, while their finances are affected not by this multiplicative factor but by the arithmetic difference between prices.

From the table at the start of this post, you can see that while the relative price differences between the cheap and expensive items tends to be about 6, the arithmetic differences vary wildly. The premium on buying high quality eggs is two orders of magnitude less than the premium on driving a sports car on a daily basis. Are you willing, therefore, to sacrifice about 100 free range egg-level luxuries each day for the privilege of driving a sports car? If not, you should follow my lead: splurge on the cheap stuff and skimp on the expensive stuff.

Enjoy the good life!

LeDopore