I love coffee. Coffee fuels me when I can’t fuel myself, and for that I am entirely grateful. But I also (ashamedly—don’t judge me) love lattes. There is nothing better than a few shots of espresso in frothed milk, and if my coffee drinking habits came with an indifference curve, I’d probably be willing to give up upwards of three cups of regular coffee for a latte. Even so, regular coffee still means a lot to me, so I’m not willing to give up good ol’ coffee for any quality latte. The lattes from Sayles are sore excuses for lattes. Simply putting some coffee in a cup of milk does not cut it; this is a despicable practice. For a latte worth drinking, I have to travel from my cozy dorm all the way on the east side of campus to Blue Mondays in downtown Northfield to purchase a latte that lives up to its name.
As a busy college student, time is precious to me, and I am most inclined to drink coffee or travel to Blue Mondays during the days I have to study the hardest. This means that the thirty minute round trip journey to Blue Mondays comes with a pretty steep opportunity cost—not only do I have to pay for the $4 latte, but I give up thirty minutes of well spent studying regardless of if I choose to stay and work at BMs or not. Also on a -50 degree (with wind chill) day, the opportunity cost of traveling to BMs includes warmth and no chance of frostbite. If I choose not to go to BMs, I save a lot of money, because even though I don’t get the latte I prefer, I get free coffee in my personal giant mug from the dining hall, and then I just study in the warmth of my dorm without making the thirty minute trip. Think of how much econ studying I could do in those thirty minutes! I’d probably be real economist by now.
So the question is, then: Is a Blue Mondays latte worth it? I don’t know—my indifference curve and preference for lattes is pretty steep (three cups of coffee is a big deal to a caffeine addict). Even given this preference, though, my marginal utility per dollar is probably highest for regular coffee most of the time, since I enjoy it, and it’s free and convenient. Every once in awhile, though, I might want to venture to Blue Mondays to treat myself because I value it so much—especially if I have the time to spare. It’s worth it. After all, it’s economics.
I thought it was interesting how you applied time as a cost towards traveling to Blue Monday. Maximizing utility occurs when MU(coffee)/P is equal to MU (latte)/P. Considering the more substitutes you have for coffee in price variation, such as free coffee in the dining hall or 2-3 dollars at Sayles, it makes sense that right now you will be buying more coffee even with your indifference curve. Although there will be days where you will decide to go to Blue Monday for a latte instead.
First of all I completely agree regarding Sayles lattes. Pathetic. However, is a Blue Monday latte really worth potential frostbite? (It’s up to you to answer that.) I also like how you added your own specific indifference curve. Great post!
I’m not too much of a coffee drinker, but I have friends that struggle with the same problem (even at other schools). One of my friends ended up buy her own coffee machine with her suitemates. It would be interesting to see if you could save on any explicit and implicit costs between buying your own coffee machine or if it would end up costing more.