One of my favorite optimization techniques is currency conversions—valuing a bunch of different things with a single number that can be used to make trade-offs. This technique has pitfalls, but it does a lot better than the naive human approach of just comparing alternatives based on a single variable and ignoring all the others.
Here are 12 (!) applications of currency conversions, roughly ordered from most to least obvious:
Valuing my time, and the advanced techniques of adjusting for quality of time spent.
Comparing purchases by valuing attributes separately. For example, when buying a PC I may think of how much I’m willing to pay per GB of RAM, per GHz of speed etc.
Comparing purchases, even wildly different ones like better soap vs. ski vacation, by converting everything to hedons/$. A useful way to do it is hedons/minute x minutes enjoyed/thing x things/$.
From the above link, you can also compare experiences by converting everything to “minutes experienced x quality of experience”. This helps reconcile the experiencing self with the remembering self, if you take the latter to be a collection of reminiscing experiencing selves.
Effective altruism.
Related: avoiding sacred values. What’s more important, the dignity of a minimum wage worker or their chance of finding a job? Instead of getting stuck on sacred values, convert and compare.
Net present value calculations: converting different forms of money into a single currency. A safe dollar today > risky dollar tomorrow. This helps think of investments, loans (which are basically anti-investments) and savings.
NPV is not just about pure dollars. Should you take the job that pays more today or the one that looks better on your resume? That depends on the NPV of that resume improvement, which is worth more to a 30-year-old than to a 50-year-old.
When I was skinny and broke, I optimized for “amount of food / $”. Today I’m neither, so I optimize for “enjoyment of food / adverse-weighted calorie”. The denominator reflects that a protein calorie in the morning is “cheaper” than a sugar calorie before bed.
The pleasure I get from me-doing-me and the price I will pay in weirdness points.
Using decision matrices to compare >10 variables when choosing which house to rent or car to buy.
One of my favorite optimization techniques is currency conversions—valuing a bunch of different things with a single number that can be used to make trade-offs. This technique has pitfalls, but it does a lot better than the naive human approach of just comparing alternatives based on a single variable and ignoring all the others.
Here are 12 (!) applications of currency conversions, roughly ordered from most to least obvious:
Valuing my time, and the advanced techniques of adjusting for quality of time spent.
Comparing purchases by valuing attributes separately. For example, when buying a PC I may think of how much I’m willing to pay per GB of RAM, per GHz of speed etc.
Comparing purchases, even wildly different ones like better soap vs. ski vacation, by converting everything to hedons/$. A useful way to do it is hedons/minute x minutes enjoyed/thing x things/$.
From the above link, you can also compare experiences by converting everything to “minutes experienced x quality of experience”. This helps reconcile the experiencing self with the remembering self, if you take the latter to be a collection of reminiscing experiencing selves.
Effective altruism.
Related: avoiding sacred values. What’s more important, the dignity of a minimum wage worker or their chance of finding a job? Instead of getting stuck on sacred values, convert and compare.
Net present value calculations: converting different forms of money into a single currency. A safe dollar today > risky dollar tomorrow. This helps think of investments, loans (which are basically anti-investments) and savings.
NPV is not just about pure dollars. Should you take the job that pays more today or the one that looks better on your resume? That depends on the NPV of that resume improvement, which is worth more to a 30-year-old than to a 50-year-old.
When I was skinny and broke, I optimized for “amount of food / $”. Today I’m neither, so I optimize for “enjoyment of food / adverse-weighted calorie”. The denominator reflects that a protein calorie in the morning is “cheaper” than a sugar calorie before bed.
The pleasure I get from me-doing-me and the price I will pay in weirdness points.
Using decision matrices to compare >10 variables when choosing which house to rent or car to buy.
Using decision matrices to compare 25 variables when choosing which woman to marry.