Economics is all about making rational choices. According to my opportunity cost is it better to spend time studying for my test tomorrow or surf the web a few more minutes? Will I get more marginal utility per price out of going to Starbucks or Subway? Looking at my budget constraint, is it better for me to buy 4 boxes of Nature Valley bars or 3 boxes of Quaker’s Chewy bars? We are constantly asked which option is the best, which is the most rational. However, many of the choices we make are irrational. One of the most common irrational choice I make on a daily bases is procrastination. Over the weekend I was trying to get a start on this assignment, but there were numerous other activities that I was keener on doing instead, such as sleeping, watching some Grey’s Anatomy, or listening to music. The thought of “I can do this Monday or Tuesday night” and “It would be so much more fun to watch a TV show right now instead of working on this essay” kept invading my mind. But, it would have made sense for me to work on this essay, according to my cost-benefit analysis. I would have had time during the week to do those other things and I would have felt accomplished once I had finished the assignment. There were endless reasons for me to do the assignment, however I just couldn’t get myself to do it. So, now I’m sitting at my desk wondering why I didn’t finish this assignment earlier.

Why do we do this to ourselves? We build up pressure and make the time to complete the task even scarcer for what? Satisfaction? It surely can’t be enjoyable to cram for a test the night before. It all just doesn’t make sense. But, I believe that procrastination is something we humans naturally do. We like to be impulsive and live in the moment. It is easier to experience the feeling of satisfaction in the present verses thinking about obtaining the feeling in the future. This is the same idea with present value. If I were to receive $1,000 today it is worth more to me than $1,000 in 4 years. I think our motivation changes as the long term turns into the short term. Writing an essay doesn’t seem as bad when I imagine myself doing it tomorrow compared to if were to do it today. What I am implying is that I don’t see working on the essay now worthy of my time and that is why I put it off for another time. The idea of procrastination relates to the idea of present value such that the longer time you have to complete an assignment the less value it has for you. Yet, the closer the deadline the higher value it has and the more urgency you feel complete it.

The level of difficulty that people have with procrastination depends on how much they value the long term benefits. With studying, students with higher GPA may have fewer problems with procrastination, because to them it is more costly to procrastinate. Students with lower GPAs might find studying more costly and less beneficial, thus have more problems with studying. This idea also ties in with the opportunity cost of procrastination. You can either spend all 5 hours studying for an exam or spend just 2 hours studying and the other 3 hanging out with your friends. The opportunity cost of receiving a better grade by studying for 5 hours is time with your friends and the opportunity cost of spending more time with your friends is earning a higher grade on your exam. Of course, this is all dependent upon what is higher up on your priority list or what you get the most utility out of.

Many people have tried to change our impulse to procrastinate with incentives. Incentives are another concept that drives economics. For example, the supply and demand curves. The theory behind the curves predicts that the market will tend to move towards the equilibrium price because everyone is driven by an incentive. By decreasing the price sellers can attract buyers and make more profit. By increasing the price buyers are able to get more of the good or service that they want. However, incentives do not always work. My incentive for writing this essay was that I would have more time during the week to working on other assignments or that someone might have this same idea for a topic and post it on the site before me. There were plenty incentives for me to write this essay, but I always found an excuse to put it off.

Everything about procrastination seems uneconomical, except for the price that comes along when you do procrastinate. For example, depending on the professor you have, turning in a paper late can come with a hefty price. Procrastination can also come with more explicit costs, such as paying late fees at a library. The behavior of procrastination becomes more costly as the stakes are heightened, for example a government can lose profit by procrastinating to implement a tax or policy that will benefit them in the long term. Nevertheless, even a looming cost, implicit or explicit, can’t motivate us humans to get the job done.

The reasoning behind why we procrastinate seems irrational, under economic terms. However, many economic concepts tie into procrastination when we look at the bigger picture. We value the present time more than the future, that is why we might chose to do things that are more enjoyable to us at that very moment. Furthermore, procrastination is something very humane and is therefore subjective to every person. Depending on what the person values more, we can look at the opportunity cost of procrastination. Until someone discovers a method to overcome procrastination we humans will just have to accept the fact that procrastination is something we do.

I had to make a trip to Econo Foods to buy lab snacks for my geology lab on Tuesday today. I set myself a budget for $10 to supply snacks for the 19 people in my lab group. I decided that I wanted to buy granola bars as a snack, since most people this week in lab will be traveling to different sites for their group research projects and granola bars would be the easiest to take along. Upon reaching the granola bar section and comparing the prices of the bars (and based on which bars I prefer personally) I found that these two options, shown in the budget constraint diagram, worked with my budget. The Quaker Chewy bars were offered for a 2 for $5 sale and had 8 bars in each box, so if I spend my entire budget on this deal I would end up with 32 bars. Also, I could pick up to 4 different varieties with this offer. The Nature Valley Variety Pack included 24 bars per pack at a price of $5. If I spend all of my budget on this offer I would end up with 44 bars, 12 more than the Quaker Chewy bars deal. However, with the variety pack I’m limited to 3 flavors.  I could either spend my entire budget on either one of the deals or I could’ve bought 1 Nature Valley pack and 2 Chewy bars packs. However, since I was getting the most out of my budget with the Nature Valley deal with 44 bars I decided to go with that one. The budget constraint diagram illustrates exactly the options that were available to me with my $10 budget. Of course, if I increased my budget I could have bought more of either one or mixed between the two more.

One other point to consider during this decision was the fact that I could only buy the Chewy bars in sets of 2, otherwise the sale wouldn’t have applied and 1 box of bars would have cost about $3 (I don’t remember the exact price, but it was more than $2.50). If I did buy an odd number of Chewy bar packs this budget constraint diagram would not be an accurate representation of my options. There would be separate points on the diagram representing the bundles if I were to buy an odd number of Chewy bar packs. If I bought just 1 Chewy bar pack for $3 and spend the rest of the $7 on 1 Nature Valley bars pack, this situation would be outside of the current budget constraint (represented by the red dot) and the line would not be continuous.

This article reminded me of the episode of This American Life on the NUMMI plant on increasing employee productivity. Cali Ressler and Jody Thompson are developing a new plan called the Results-Only Work Environment, ROWE for short, at Best Buy. They are wondering what will happen if they judged employees only on their work and not how they did it. This means that people are allowed to work from home, whenever they feel like it, all meetings would be optional, even if you had been invited, and no one would judge you for how much time you spent in the office, as long as you got the work done that you needed to do. Managers would set overall expectations, such as increase sales by 10%, but no micromanaging would be done, such as keeping track of hours.

Since I will (hopefully) become employed one day, this article made me think about the opportunity cost of working a full time job and other things I could be doing with my life. With ROWE employees are not tied down to their desk and are able to better allocate their time between work and leisure. The opportunity cost of leisure time, for example if you were to take a week off to travel somewhere, would not be as high with ROWE. As long as you are accomplishing your work you don’t have to worry about how many hours you would be sacrificing to spend in the office. Under the old system, you would be judged by your boss and co-workers for missing a day of work, however with the new system you would solely be judged on your results. Another trade-off employees benefit from with this new plan is the time they spent commuting. Workers could use the time they travel to and from work and trade it to spend time with their kids or sleep. Managers would also could better allocate their time to focusing on the expectations and not micromanage the employees, such as checking on who is in the office, who is late and who is working extra hours. Overall, a lot of time would be saved and could be put to better use, this can be seen by looking at the opportunity costs.

Of course, the big question with this plan is does giving employees more freedom increase productivity? According to the article, Best Buy has seen an increase of 41% in productivity because of the new plan. By allowing the employees to working from home they are less likely to become distracted, take longer breaks, and don’t waste time commuting to the office. I don’t think this would be true for everyone since each person has a different work environment that works best for them. I would probably be more productive working from home, since I easily become distracted if I’m working around others. This plan would allow for those who work better at home to have that option, but many might take advantage of the new plan to have more leisure time and not provide the expected results.