Monday, June 13, 2005

Leisure Externalities

Klieman gives me an excuse to say something about leisure:

Solving the TGIF problem would, of course, leave unsolved another problem: according to the hedonics studies, a large proportion of people also don't much enjoy their leisure, and spend it watching television programs they don't much enjoy. But one problem at a time.
In my day job I am thinking about what made poor countries rich and rich countries poor since 1500, a question posed in a talk from Dr. Acemoglu. An aspect of the solution (IMHO) involves externalities in the production of human capital that pervert incentives.

For the uninitiated, an externality is a cost or benefit others receive when someone does something. If you smoke in a bar, the second hand smoke is an externality. Same for your green house gas emissions. An example of a positive externality is your participation in a telephone network. Since your participation makes everybody else’s participation more valuable (by increasing he number of people they can communicate with through the phone), this is an externality.

I think that leisure activity produces significant externalities that increase the value of leisure participation in others. So we may get into a situation where individuals start leaving the leisure sector because it makes private sense for them to enter the work sector, but the damage to the social fabric may be greater then the private benefits because the externalities produced for others is not taken into account.

Thus we may be worse off as a society. Sitting home alone watching bad sitcoms seems to indicate a coordination problem that prevents the realization of collective participation externalities. In other words, if all of our work schedules weren’t so hectic and all-consuming, we could hang out and watch bad sitcoms together, or throw a BBQ, or play a game of baseball, or argue politics, or etcetera. [Incidentally, that last one before etc. is very important.]

Update: I should have mentioned in the original that depressing the value of leisure also makes people more willing to accept crappy jobs. In other words, you don’t care about endless hours of tedious data entry because all you could do otherwise is watch stupid sitcoms.
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5 Comments:

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4:16 AM  
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