Wolfers finishing the 2008 Stockholm MarathonMarketplace, the economics program on American Public Media, is running a fun series this week — asking economists to reflect on how thinking like an economist can shape your personal decisions. While the pieces are pretty light, it’s also a neat opportunity to teach some simple economics. Yesterday, it was my turn, and so I focused my economic lens on my marathon training. And thinking like an economist means thinking in terms of opportunity cost.
When I analyze the opportunity cost of running, it turns out to be surprisingly expensive:
As I spend my hours slugging out the miles, I’m forced to confront my choices. Instead of sweating it out on the trails, I could take on extra teaching and earn a few extra bucks. And so going running costs me good money. By my calculations, my 16-week training program comes at an opportunity cost of several thousand dollars. A quicker runner would have a smaller opportunity cost. It’s only because I’m both slow and an economist that I fret that the world’s cheapest sport is actually incredibly expensive.
But despite this cost, running is still worth it. Why? There are many other choices that non-economists make that come with an even worse cost-benefit ratio. The true advantage of thinking like an economist is that it can help you make better decisions:
To an economist, the choice is still a no-brainer. We think you should only do what you love, and pay for it by doing what you are good at.
By sticking to economics, I make time for running. Rather than spend hundreds of dollars worth of time cleaning my house each Sunday, I hire a cleaner who does a better job at a better price. When a friend asks me to help them move, I write them a check to pay professional movers instead. It’s just more efficient. And while it can be hard to forgo extra income for a long run, it is even harder to justify wasting that time on Facebook. And with the time that saves, I’m pulling on my shoes to head out for another run.
You can listen to the full commentary here.
and 
. You can also watch it on 
So, Would you like to help me move?
I think this sort of opportunity costs analysis works best for personal activities. The moving example in particular strikes me as problematic. The benefits of spending time with friends, that shared experience, would seem difficult to quantify and something you might ultimately wish for more of later in life (running may prolong life though). There’s also a cost, albeit one of the social type, associated with providing a check instead of labor.
That said, I imagine many of your friends understand your highly analytical behavior and thus you have self-selected friends who would minimize any social costs associated with your behavior.
Opportunity Cost is the wrong tool for the job. What a poor world we would have if the purpose of life was the maximization of our bank accounts. There are names for people who attempt it and they are not nice.
The purpose of life is to feel good in your own skin. Money is nice but it is not the name of the game. To be rich and miserable is not so uncommon. It is to be avoided.
Keep running, or buy one of those continuous lap pools. Better for the knees.
Would be interesting to also factor in the savings/expense of less or more health care you’ll need due to your love of running. If you stay injury free you may prevent several health problems in the long run, and save on medication, hospital bills, and stress. If you become injured, there may be more health care bills. Improved mental health from running may also factor in decision making and life choices, which may lead to improved concentration, higher productivity, and higher income. If you picked up an extra teaching gig during your running time, you may become exhausted and stressed which could lead to poor health habits and eventually disease.
This goes to highlight that doing things efficiently doesn’t always mean that someone is living life to its fullest.
As a grad student in applied economics many years ago, where I first learned the formal notion of opportunity cost, I was eager to try out these ideas. So I offered a friend (majoring in chemistry) the taxi fare back to our building from an auto repair shop where he needed to drop off his car rather than drive him back. As I tried to explain to an increasingly irate buddy why this was the correct approach, I recall thinking that this idea did not translate well into practice. It does work well for tradeoffs in allocating one’s own time between activities (should I run or should I teach) or when the alternative is a commercial transaction like hiring a cleaning service. Friends value fairness (he would have happily offered me a ride if I asked), signals of commitment to the friendship etc. Which is why the field of behavioral economics is getting more attention.
Do you experience the endorphin release commonly referred to as “runner’s high”, and if so, what would the cash money opportunity cost to induce a similar feeling by other means?
to Eric (#2) — Research has cast serious doubt on the conventional wisdom that running is bad for your knees. There was even a study that directly compared the rate of osteoarthritis of the knee in runners and swimmers, and the runners’ rate was lower. You might want to check out these links:
http://well.blogs.nytimes.com/2009/08/11/phys-ed-can-running-actually-help-your-knees/
http://www.ncbi.nlm.nih.gov/pubmed/4028541?dopt=Abstract
You forgot you gained some health benefits from running that equate to a longer healthier life, which are worth something. Either look at everything or nothing. Its not as simple as opportunity cost.