Sunday, July 21, 2013

Cost Benefit Analysis Parenting

It might surprise the people who know me in real life that I minored in economics in college. I made this decision for the reason I do a lot of things, someone else told me that it would be a good idea. This strategy isn't terrible if you're asking the right person for advice. I, of course, did not. The person who convinced me to be an economics minor was my boyfriend at the time. He, himself was an economics major because he was sure that this was the best way to work on Wall Street and make tons of money. However, he was also a terrible student. I mean like, really terrible. The semester we met he was on probation because his grades the previous semester had been something like: F, F, F, D, and a withdraw. I told him that I was impressed with the withdraw because it meant he was sober enough to make it over to the administrative building (which was on another campus), and fill out the papers to withdraw from the class. So, when I was 18, rather than talking to, say, an academic counselor or a dean or (God forbid), my father who is a professor, or any other adult, I took advice from my 19 year-old boyfriend who was mid-way through flunking out of college. Good Lord, it sounds even more insane when I write it than when I just think about it.

I slogged my way through micro and macro economics making mediocre grades that I earned by having an only mediocre grasp of the material. By the time I broke up with the boyfriend at the end of my junior year, it was too late to switch to something else. For years, whenever I revised my resume, my economics minor was a reminder of that relationship.  There's nothing fun about reminders of failed relationships, but a college minor is certainly better than a tattoo...or a child.

I wonder if Ryan Phillippe looks at his daughter Ava, slaps
his forehead and says, "oh right! That's from when
I was married to Reese Witherspoon!"

Looking on the bright side, if I hadn't minored in economics, I never would have learned about cost benefit analysis.

Now before you go to sleep, hear me out. Very basically, in a cost benefit analysis you total up the costs and the benefits of doing a particular project to determine whether it is worthwhile. Obviously, some benefits aren't financial, but the theory is that you can attach a dollar value to intangible benefits in order to make the comparison. (I'm sure we could debate whether that's true and even whether that value is the same to every person...but that conversation is for a forum that doesn't have pictures of celebrity children and cat-anus tattoos.) Economists value the benefit by figuring the minimum amount of money you would take to forgo that benefit. For instance, if the benefit is having kids quietly sitting in the car, the value would be the amount of money you would accept to have them screaming at each other instead. Coincidentally, I think the amount is probably the price of purchasing and installing an after-market DVD player.

There's also a time element to the calculation. For example, a project that costs $1 today and brings $1 worth of benefits, but not for ten years is probably not worth the $1 investment because $1 today is worth more than $1 in ten years. This is because of interest rates, inflation, and the possibility that the world might end tomorrow. I'm pretty sure that the economists call this the "time value of money" and the rest of us call it "justification for impulse purchases."

I employ a simplified version of this analysis when I make many parenting decisions. I'll bet that a lot of other people do to, they are just less nerdy than I am, and therefore don't sit around calling it a "cost benefit analysis," and instead just call it "making a decision." Potato, potato, I say.

Avoiding the ER - The other day, the children were in one of their let's-run-around-in-circles-and-punch-each-other-in-the-head moods. I quickly calculated the cost of an ER visit ($150 insurance deductible) plus the dollar value I place on not having to spend four hours in the ER ($10,000), plus the dollar value I place on not having a child in a cast ($273.52 - arbitrarily) and came up with my total ($10,423.52). Clearly, we want to avoid that outcome! These calculations allowed me to more than justify the $127.43 that I spent at Michael's buying two wooden birdhouses, a pinewood derby car, paint, sidewalk chalk, and other various sundries to keep the children occupied for long enough to forget about maiming each other.

Leave it to Beaver - On our last day in Maine, we visited a shop and told the kids that they could pick out a souvenir from the trip. The Girl picked out a sweatshirt, the Boy picked out a snow globe, and the Baby picked out this:

"That's not really a Maine souvenir," I said, while trying to identify the species of animal depicted in the pink and purple plush. "But I loooooove it. It's so cute!" said the Baby, as I took in the buck teeth and flat, paddle-like tail and decided it was a My Little Beaver. I quickly figured that the cost of the animal ($4.50 - on sale) was not even close to the benefit of not hearing the Baby complain ($50.00 - although this is a sliding scale based on how tired I am) plus the humor benefit of being able to walk around the house asking, "has anyone seen the beaver?" (priceless). Obviously, we came home with the beaver. According to the YooHoo & Friends website, it's real name is Canook, which I think might be offensive. Thus, I call her Anastasia Beaverhausen when no one is listening.

Lunch Time - One of my grumpiest times of day (and I have a lot of grumpy times) is when I have to make lunch for everyone. Unlike dinner, when everyone eats the same thing (more or less), lunch is a free-for-all when every kid eats something different. I'm not sure how we ended up in short-order-cook land for lunch, but unfortunately we are there. I would feed the children Chick fil-A every day if I didn't do my cost benefit analysis. I figure that the benefit to eating a relatively healthy lunch at home is $500 (i.e., I would take $500 per meal to feed my kids crappy food. Not sure what that says about me). I would also add in the benefit to me of not feeling guilty about feeding my kids crappy food is another $500 (I need a total of $1000 per meal to poison my kids and buy off my guilt). The cost of eating at home is probably about $10.00. On the other side of the ledger is the cost of eating Chick fil-A ($25.00-ish). However, there is the benefit of not having to make four different lunches ($100 - oh, if only someone would pay me to make lunch). It's no contest and this is why I continue to be grumpy and make lunch at home.

And when I make lunch at home, naturally, this is what it looks like.
Bus - The kids start school next week. I KNOW! For the first time, all three of them will be in school for a full day. I'm very excited about the prospect of a couple more hours of me-time, I'm not so excited about the logistical nightmare of getting three children to three different schools every morning. The best way to handle this would be to have the Girl take the bus in the morning. I love the idea, the Girl, not so much. The cost of driving the Girl can be measured in the cost of gas, degradation of our environment, pollution, etc. ($150 - roughly). The benefit to driving is that I don't have to listen to her complain for the 180 days of school about getting up at 6:20 to catch the bus and complain about being the only one who has to take the bus in the morning. Given the amount she's already complained, I'd value this benefit at $20,000. Even though the bus is free (as in no cost) and the benefit is that I'll retain my sanity in the morning, my sanity is on deep discount after this summer and not worth a whole lot. Hence, the K and I will be transporting the Girl to school each day. The kicker is that we'll be driving her in this:

That'll teach her to complain.
Cleaning - My house is often a mess. I don't mean that it's dirty (although sometimes it is). I mean that there are piles of stuff everywhere. For a week, the girls had a dentist office set up in our family room, including a large white board indicating that their patient (a talking Mickey Mouse doll) needed major periodontal help.

I think he'd be better off having all his teeth pulled and being fitted with a nice set of dentures or implants or whatever euphemistic name we have for false teeth nowadays. 

Below is a picture of our family room on a typical afternoon. You'll notice that there are four different helmets in this picture. During one of our many thunderstorms, the children decided they needed to wear helmets in the house, just in case the roof collapsed. This was especially problematic for the Boy who had to maneuver his food around the face guard on his batting helmet at dinner.

Has anyone seen the beaver? Oh, there it is, under the
coffee table. 
On occasion, the children decide it would be fun to help me clean. Picking up is never fun, but mopping is fun, spraying bottles of cleaner is fun, and using the Magic Eraser is fun. When they want to "help" me, I try to figure out the cost and benefit of accepting their assistance. You would think that the cost of them help me is zero, but I have a wood refinishing bill that defies that assumption. We all learned the hard way that the cleaner that works so well on granite counter tops also removes the finish on a wood coffee table. If you throw in the fact that they all use about five times as much of whatever cleaner as do I, I'd say it costs me around $20.00 for their assistance. The benefit is that they are temporarily happy ($200.00) and the house is marginally cleaner than before we started ($6.00). So, I let them help me clean.

I'm sure I made a million mistakes in my analyses, which is further proof that I should never have darkened the door of the economics department. I can honestly say, though, that this is the most research I've ever done on a blog post and the most leisure-time reading about economic theory I've done since college (reading Freakanomics doesn't count). So, does anyone else have a worse reason for select their college major or minor?  Does anyone else allow their children to wear batting helmets at dinner? Does anyone else have a pink and purple beaver? Stuffed beaver! I'm asking about the stuffed beaver. Never mind.


1 comment:

  1. No knowing what I was thinking, I chose to be a business major myself. I don't do numbers. I took econ and then almost failed accounting. Thankfully, it wasn't too late to change majors. It's always nice to see other people's family rooms cluttered with kid stuff.