Saturday 9 August 2014

Time Is Money, But Money Is Also Time



With an upcoming wedding and honeymoon, I recently bought some extra annual leave from my place of work. I valued the extra time more than the money, so I acted rationally. It would, therefore, be foolish to look at the money I’d spent on the extra annual leave and claim I’d wasted my money, just as it would be foolish to stop a shopper after they’d left the checkout at Tesco and claimed they’d wasted the £75 they’d just spent on shopping. In both cases – mine and the Tesco shopper – we valued the thing(s) being purchased more than the money spent on those purchases. Simple enough, right?

Alas, Emily Gosden, in this Daily Telegraph article about how households are apparently 'wasting £120m' a year using tumble-dryers in summer, seems to not understand this basic principle of a voluntary beneficial allocation of resources:

“The declining popularity of the traditional washing line is costing British families at least £120m a year, as tumble dryers are routinely used throughout warm summer months. More than half of all households who own a tumble dryer use it at least once a week during the summer, according to the Energy Saving Trust. The organisation, a charitable foundation which offers advice on cutting energy bills, said that a typical household could save £18 from their annual electricity bills “by line drying clothes instead of tumble drying” during June, July and August. “

Here’s what Emily Gosden is missing. Just like the case with me and my extra annual leave, what British householders are losing in money by tumble-drying they are more than making up for in gained time in not having to go outside to put their clothes on the washing line and then bring them in after (as well as factoring in the lack of guarantee that the period of time in which the clothes are out there will remain dry). Unlike money, time is a precious resource that cannot be retrieved – so those using tumble dryers are those for whom the time saved more than pays for the £18 per year lost (which, let’s face it, at 5p per day, is hardly much).

The Energy Saving Trust wants to offer us advice by telling us that “A typical household could save £18 from their annual electricity bills by line drying clothes instead of tumble drying during June, July and August “, but this is an absurd one-sided perspective that fails to account for the gains distilled from that £18 annual cost. Those for whom the extra time gives value over the cost will use the tumble dryer more than the washing line. Those for whom the financial saving gives value over the extra time spent putting the washing on a line, getting it in, and sometimes multiplying this task due to inclement weather, will use the tumble dryer less than the washing line. Each will be acting rationally according to their preference. What isn’t rational is to tell us that as a nation we, collectively, are wasting £120m using our tumble dryers.

Finally, take each household’s £18 and translate that to minimum wage hours and it’s less than 3 hours. Let’s be super generous and skew the figures drastically in the Energy Saving Trust’s favour and suppose that each household’s weekly total washing line activity is just half an hour. Let’s then multiply that by the number of weeks in just the warmer months of the year (May-September). That amounts to:

22 weeks x 30 minutes = 660 minutes (11 hours)

Given that even at such a conservative estimate, using the tumble dryer from May to September saves 8 more hours than the 3 the £18 saves (or £32.48 more cash if you want to translate it into monetary savings), it’s clear that tumble dryer users understand the rational allocation of their time and money better than both Emily Gosden and the spokesperson for the Energy Saving Trust. It’s not surprising, of course – for too often we have to remind interfering busybodies that most of us know how to run our lives better than they do.

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