There has been a great deal of things that have been bouncing about in my mind lately but one that has been persistent is the concept of opportunity cost and its subjectivity and particularity. The vague idea of opportunity cost as I understood it from high school econ was that it was a tool to help make decisions. If the cost of doing one thing is greater than the cost of doing another thing, then the latter choice should be the better choice since value is conserved.
Say for example, that I wanted to go to the pub with my friends on Thursday night but a co-worker called out at work and I have the opportunity to cover their shift on that same night. I have to then assess the opportunity cost of either going to the pub and enjoying my time with friends and spending money, or going to work and actually gaining money while not being able to enjoy the company of friends.
How does one make such a decision? In terms of monetary value, one can say that it would be a good idea to go to work in order to actually increase the flow of money gained to one's person instead of not gaining or decreasing one's flow of money as a pub and friends tend to do just that. But we can't account for the situation of every person. Suppose the meeting with friends is an investment, as said friends could happen to mention a job that one might like that pays way more with less work with an easy in. If that was the case, then going to work would actually be the lower value of the two situations as one should ideally take a small loss in order to receive a greater gain in the end. On the flip side again, the investment of going to work when asked to might influence the value of one's person to a manager and may just be the tipping point to that promotion/raise one has always wanted.
Subjectivity and personal preference is also an issue in the idea of opportunity cost as the individual's assessment of quality of one thing might be greater than the other. Perhaps the individual holds his friends in higher regard than work or vice-versa. Perhaps there is a romantic love interest in either location. Perhaps work is enjoyable already or that maybe the individual is saving up for something in the future.
I was thinking about this concept specifically as my sister complains about problems that are technical in nature and requests that I do something about it. I often wonder whether it is worth my time to troubleshoot these problems or whether it is worth her own time to troubleshoot these issues for herself.
A more specific example is from a couple of days ago in which her car's passenger side headlight bulb went out. The car has had a history of mechanical issues because it simply was not made very well. For a 6 year old car, it has been taken to the shop at least twenty or so times for issues regarding failures to some part. Whenever theres a problem, she first asks me (as I used to work on my car back when I had an old clunker) then when I stated I don't know or I don't have the time, she simply takes it to the dealership where she got the car to get it repaired.
To set the record straight, I find myself to be an amateur do-it-yourselfer as I enjoy learning how things work. I enjoy the experience of it even though many times it is a frustrating experience and I find myself way in over my head. In the end though, I get closer to finding out what my limits are in terms of what I can do, what I know, and what I am willing to do. As for her car, I find myself limited to minor repairs as it is a relatively new car with many electronically controlled components(which is not my specialty) and with many parts parts I am not willing to fix due to the high cost of specialty tools(which will only be used perhaps once or twice) needed to get the repairs done. Replacing headlight bulbs, though, is a relatively easy task given what I know.
It took me less than one hour to get to the auto parts store, find out which headlights to buy, buy the headlight bulbs, come back, assess how one is to remove the broken bulb, and ultimately replace the bulb. I actually purchased a set of bulbs and considered replacing the other one as well as it would be weird to use two different brand lights as a set seeing as one company possibly makes one brighter than the other.
SEGWAY: My theory is that cars are typically well balanced as there is always a set of something to counterbalance something else. For example, a front driver side wheel is balanced with a front passenger side wheel. If one tire is new and the other is old, then one tire will try to compensate for the other(and it physically can't) and cause increased wear or even dangerous conditions.
It was a good thing I got the set because as I checked the other bulb, I saw that it began to bubble up on the side and was well on its way to blowing as well. I replaced both bulbs and thus the repair was made for about 40 or so bucks. I walked back into the house considering my sister's other option, to get it repaired at the dealership. It is to my belief that repairs done at a dealership is more expensive as the parts used to repair are (what we believe to be)genuine factory parts(which is what is built for the specific model) with brand certified mechanics who specifically deal with mainly the cars of the make. I looked on Google and saw that the repair costs in California are on average $60/hr not including the cost of genuine parts. The work, I assume, definitely can be done in one hour as I did it in less than that and I am not a certified mechanic. The bulbs I got were not factory bulbs but the brand I bought is a trusted brand I've used before in the past and is fairly popular with the public. I am certain they are less expensive than the factory bulbs.
So what I am getting at is, what is the opportunity cost of my sister's getting her own bulb replaced versus getting it replaced by the dealership? I am convinced that in terms of monetary value, the better choice is to replace the bulbs personally. Cost being $40 bucks versus at least $100 at the dealership. Of course she completely skirted the cost of both by having me do the repair(which she hasn't paid me back for yet) but I wonder what she would have done had I not been there or had I refused to do it. I find the task to be rather simplistic, but I know that my sister does not care for the technical or the mechanical. She's good with memorization and creativity(which I lack) but she simply refuses to figure out anything technical, whether it be cars or computers. All she wants is for whatever it is to work. I can understand that. But is it worth it, in her case, to take the time to figure out how to replace the bulb and do it, rather than to bring it to the dealership? She was willing to bring it to the dealership so I guess she was willing to accept the higher monetary cost of repair over self-repair.
That I can understand as well, sort of. I find that I have issues with reading most terms of contractual agreements in products and services I receive as I don't have the patience and am willing to take a loss due to negligence and misinformation. However, had I the time and patience, I would read over every sentence. But I've already assessed for myself that this was a waste of my time, that I could be enjoying the product instead or something else for that matter. It is a matter of time and importance and of subjectivity. I, however, from time-to-time find myself standing back, observing this notion and see the worth in learning new things. But that is my own subjectivity and my own importance. I find value in learning different things. Thus, we can only assess for ourselves what opportunity cost is for the choices we have.
Wow, that was a long bit of writing about nothing. I need to pat myself on the back for this.
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