Tuesday, November 5, 2013

The efficient outsourced life

Jon Steinsson and Emi Nakamura do not have enough time to do everything they need to do. They’re recently tenured, highly productive rising stars at Columbia University, as well as parents to an infant. But they have a secret weapon helping them prioritize: Econ 101. ...

Even if you’re faster and more effective than everyone else at a given task — fighting with the cable company, say, or folding your socks just so — you still might be better off if you pay someone else to do it for you. Why? Because there is an opportunity cost for every hour consumed by these tedious, nonproductive tasks; there exists some higher-value activity you could be spending your time on instead.

Steinsson and Nakamura, both economists, take the tenets of their field seriously. And so they outsource as much of the humdrum aspects of their personal lives as they can.

Last year, the couple hired a personal chef. She drops off five healthful meals at the beginning of every week to reduce the time they spend cooking (they used to cook recreationally; now they’d rather spend that time with their son). They have also paid people to: build Ikea furniture for them (even though the service often costs more than the furniture itself); teach them how to use software programs and baby carriers; and load their CD collection onto their computers. They even hired someone to spend hours going through thousands of old family photographs to figure out which are the “good ones.”

That last task has proved a bit problematic. It’s hard for a stranger to look at snapshots from your childhood and determine which ones represent truly memorable moments. Still, Steinsson remains confident in the theory. “We haven’t figured it out yet, but we haven’t given up,” he told me. ...

Part of the problem is that most people don’t understand the value of their time, particularly if they are salaried. Paying someone to buy your groceries or take the car to the mechanic sounds like money down the drain if you’re not billing hourly. But buying yourself an extra hour to work today can be good for your career tomorrow, if doing so improves your chances of getting a promotion or a raise.

That’s why Steinsson and Nakamura paid for housekeeping services even when they were penniless grad students. Outsourcing household tasks meant they had to take on more debt, but they calculated — correctly — that spending an extra hour working on a paper was better for their lifetime expected earnings than spending that same hour vacuuming.
--Catherine Rampell, NYT Magazine, on applying comparative advantage theory to your life