I am sitting here listening to the podcast and writing my blog because the opportunity cost of listening to the podcast by itself is a half of hour studying for a quiz tomorrow and also whatever I could be doing during the time I write his blog. The idea of opportunity cost is an every day occurrence and by thinking like an economist I can try to make more informed decisions.
Being a big time sports fan, I have never thought about the opportunity cost of buying a scalped ticket, or what I am giving up by attending a live sporting event for that matter. One would be watching the game on a TV and avoiding the cold and obnoxious opposing fans, i.e. Iowa and Ohio State fans. Russ Roberts take on Duke basketball tickets was really funny in how the profs asked for raises, yet wouldn't sell their tickets for 10 or even 2,450 dollars more then face value. You could darn well bet that my tickets would be on eBay for 2,500 dollars.
I think students myself included seldom think about the true opportunity cost of college. The jobs and things we could be doing during this time as well as the sum of money we pay to get educated. There are certainly some days where I wish I could go and work rather then take a test but in the long run it simply isn't worth it.
As I sit here and struggle to make this more then just a few short paragraphs I realize that I am sacrificing time on other homework. So I will exercise my opportunity cost right and get to studying!
Hey Nate,
ReplyDeleteI liked your point where you said: "I think students myself included seldom think about the true opportunity cost of college. The jobs and things we could be doing during this time as well as the sum of money we pay to get educated. There are certainly some days where I wish I could go and work rather then take a test but in the long run it simply isn't worth it."
I started college when I was 31, so I kind of lived my "opportunity cost". I ran the numbers and it was a net loss as far as money was concerned. Those 13 years after high school where I wasn't in college I made less money than I would have if I'd gone to college first. I worked at several different jobs, started a business, sold my business, lived in New York, lived in Washington DC, owned a couple of different houses, played in a regionally (un)famous jazz/funk band and toured the country.
I'm a different person now than the one I would have been if I'd gone to IU at 18 like I'd planned. I'm going to be a pharmacist when I graduate now, but If I'd gone right to college out of high school, I'd have been a music major. (Probably would have gotten a job teaching orchestra at a high school.)
I'm running the numbers again... Assuming I live another 50 or 60 years I'm coming out monetarily ahead this way.
However, one of the first things I learned in econ was the definition of wealth. Wealth is whatever one values.
I'm not sure what my original point was, other than the fact that calculating the true opportunity cost is nearly impossible, even with the benefit of 20/20 hindsight.
In any case I wish us all the best. May our opportunity costs be low and our wealth be high!