The Crow's Dream

Philosophy, geekery, and the meaning if life, and what I read this week…

My Stab at Economic Theory

with 3 comments

Lately, I have been reading a lot of books about economics. I know that reading a lot about something doesn’t make me an expert, but I’ve really been wondering about the value of things, and sometimes, I wonder if spending a certain amount of money on entertainment would be worth the amount of joy I’d derive from it, so the other day I came up with a formula to figure it out. Just for fun, I decided to take a stab at quantifying the whole thing, though I do not believe that it is a good idea to put numbers on everything. I did ejoy trying to think like an amateur economist though. Here is the result:

First, take your hourly wage, and figure out what percentage of it you would be willing to spend on entertainment. For example, if you made minimum wage, and you were willing to spend 10% of your income on entertainment, you would take $7.25, and multiply it by 0.1 (to figure 10%). You would get about $.72, then you would multiply that amount by the number of hours that you plan on spending with the book. If you were thinking about one of Brandon Sanderson’s books, you could look forward to about 20 hours of unadulterated, epic fantasy and joy, so you would multiply $.72 times 20. You should be willing to pay about $14.40 for the book. A variable on the formula allows you to multiply the ideal price of the book, by the number of people who are going to read it, so if your roommate, Joey, is going to read it, then you could pay $28.80 for the privilege of owning the material in question–assuming you like Joey.

This formula varies widely, specially when related to disposable income. Some people may make more money, but be unwilling to spend a lot of it on entertainment, others may make less, but be able to spend it more freely.

The other factor is that this works only for books you read for fun. Text books, or self-development books may be worth more for some people.

Here is the formula (I’m not a mathematician, so correct me if I expressed it wrong, and feel free to send the right one):

((HW*X) FT)) P=IP

HW = Hourly wage.

X = The percentage (in decimals) you are willing to spend on entertainment.

FT = Fun time the ride from the book.

P = the number of people, you like, who will have access to the book.

IP=Ideal price of item

 

What do you think?

I got the image from the Wikipedia and it is in the public domain.

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Written by Hector

April 14, 2011 at 4:43 am

Posted in Comics, thoughts

Tagged with , , , ,

3 Responses

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  1. I LOVE this. I (shamefully) haven’t been reading much, so I’m going to use this formula for audiobooks.

    So here comes the algebra….
    ((HW*X) FT)) P=IP

    ((30*.1) 12)) = IP

    I’m going to leave out the P because, for the most part, nobody in the house listens to the same audiobooks I do. I also never re-read or listen to the same audiobook twice, so I’m just including the total hours of the audiobook I’m currently listening to (which is Nathan Lowell’s Double Share).

    IP = 36

    That would imply that I might be willing to spend 10% of my hourly income, being $36, on this one audiobook. That’s quite telling. Especially since I have always had a particular aversion to PAYING for internet-related services. I have never paid for an audiobook. When you came from the generation of Napster and torrent, paying for online items seems unfair (which of course it isn’t at all).

    Interesting – Thanks Hector.

    Carina Gonzalez

    April 16, 2011 at 2:28 pm

    • Of course, this only meant to be a guideline, and not perfect one, at that. I thought it would be fun however, to try and come up with a mathematical way to figure out how to approach different parts of our lives. There are formulas to figure our ideal weight, heart rate, even the amount of food we should eat. Why not try to come up with something for other things? Even if this formula doesn’t always hold up in the real world, I had fun coming up with it. Maybe it’s from playing all that D&D when I was younger.

      Hector

      April 16, 2011 at 3:36 pm

  2. I will immediately take hold of your rss feed as I can not find your email
    subscription link or e-newsletter service.
    Do you’ve any? Kindly let me understand so that I may subscribe. Thanks.

    meaning of dreams

    April 29, 2013 at 11:14 pm


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