What Is “Opportunity Cost”? Does It Matter For Happiness? –Yes.

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One of the things I love about studying a new subject is learning the particularized vocabulary. New words describing new concepts allow me to understand the world in a deeper way.

For example, in law school, after I learned the concept of “acting in reliance,” I suddenly saw people acting in reliance all over the place. (For example, when my friend John signed a lease for a two-bedroom apartment because Michael promised to room with him, he’d acted in reliance, and so when Michael wanted to move in with his girlfriend instead, John was entitled to hold him to his word.)

From the field of psychology, I picked up a useful term, “unconscious overclaiming” (something I’m very guilty of). “Uunconscious overclaiming” is the phenomenon in which we unconsciously overestimate our contributions or skills relative to other people’s. This makes sense, because we’re far more aware of what we do than what other people do. I complain about the time I spend paying bills, but I overlook the time my husband spends dealing with our car. Also, we tend to concentrate our efforts in the areas that we think are important, so we think our contributions are the more valuable. You might think that getting the weekly reports finished on time is very important, while your co-worker emphasizes prepping for a presentation.

Lately, I’ve been thinking about another term I learned in law school: opportunity cost. (It’s so odd, what I remember from law school!)

“Opportunity cost” is an illuminating concept in this context.

When a resource (like time or money) is scarce, taking advantage of one opportunity means forgoing another opportunity. That’s the opportunity cost. If you decide to spend three years in law school, there’s an opportunity cost; it costs you the other opportunity you could have pursued during that time, with that money. If you spend your vacation going to the beach, there’s the opportunity cost of not going camping.

Opportunity cost is an important issue in the context of children’s time. If your child is taking piano, he isn’t drawing. If she’s reading, she’s not playing soccer.

It’s easy to ignore the opportunity costs of children’s activities and to undervalue children’s time – and in particular, their free time. Shouldn’t they be getting the most out of their time? Shouldn’t they be learning things now, that they’ll be happy to know, later?

Yes…but. When I think about my childhood, I wonder if I didn’t get the most value out of the time I spent goofing around. It was valuable to play sports (which I hated) and to take guitar (which I hated), true. But what was the opportunity cost of the time I spent doing those things? What other activities would I have done? That’s unknowable.

I’m not saying that lessons aren’t valuable. They can be — very. But I think that it’s easy for me to forget about the opportunity costs that limit my daughters’ use of time, and my own. If I’m working on customizing my YouTube channel, that means less time for research.

Because one of my Secrets of Adulthood is that the opposite of a great truth is also true, I also try to ignore opportunity costs. I can become paralyzed if I think that way too much. Someone once told me, of my alma mater, “The curse of Yale Law School is to die with your options open” – meaning, if you try to preserve every opportunity, you can’t move forward.

As always, happiness leads me back to mindfulness (aargh, I’m just not very mindful!): mindfully to choose how to spend my time, or how my children should spend their time, with the knowledge that spending time one way means not spending it another.

From 2006 through 2014, as she wrote The Happiness Project and Happier at Home, Gretchen chronicled her thoughts, observations, and discoveries on The Happiness Project Blog.

 

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