How Much is Your Time Worth?

“I didn’t get much done last week be­cause it was so hot.”

It wasn’t the first time a client said this to me, and I was cu­ri­ous. “Have you con­sid­ered get­ting an air con­di­tioner if it’s that bad?”

“No” He replied (let’s call him Philip), “An open win­dow is usu­ally enough. It’s just that the heat­wave this week was par­tic­u­larly bad.” When we dis­cussed it a bit more, Philip said it didn’t seem worth the has­sle since the AC only re­ally felt nec­es­sary for a few weeks dur­ing the sum­mer.

So, was Philip right? Is it worth buy­ing an AC as a pro­duc­tivity hack?

How much is your time worth?

Most peo­ple don’t think about air con­di­tion­ers when eval­u­at­ing their pro­duc­tivity, be­cause it’s not within the nor­mal scope of time man­age­ment. But if you frame pro­duc­tivity as the care­ful use of your re­sources—in­clud­ing time, effort, and money—to ac­com­plish your goals, then an AC is fair game as a pro­duc­tivity hack. The ques­tion be­comes “is the cost of buy­ing the AC a good deal for the pro­duc­tive time it saves you?”

If you don’t already have an es­ti­mate of how much you will spend to save an hour, try es­ti­mat­ing it with the tools be­low. A dol­lar value is a handy tool when de­cid­ing which time savers are a bar­gain.

This Clearer Think­ing tool is con­ve­nient for calcu­lat­ing the value of a marginal hour of your time. (A nor­mal work hour may be worth more or less to you, de­pend­ing on whether you care more about out­put from fo­cused work hours or work/​life bal­ance. The marginal out­put of an ad­di­tional hour worked de­creases, prob­a­bly start­ing some­where af­ter three to six hours per day. On the other hand, the marginal value of an hour of free time to you starts in­creas­ing the more you’ve worked.)

Another way to calcu­late the value of a marginal hour of work time is to look at what you could earn in a marginal hour as a baseline for how much your time is worth, e.g. tu­tor­ing on Wyzant. Th­ese es­ti­mate how much you would be will­ing to pay for an hour of your time. If your in­come is par­tic­u­larly un­sta­ble or you have less than 6 months run­way, you may want to be more cau­tious about spend­ing money.

You could also try di­rectly es­ti­mat­ing the value you pro­duce in an hour. Since this seems difficult to do for most peo­ple, a plau­si­ble proxy is how much ex­ist­ing met­rics value the im­pact of your time. 80,000 Hours’ sur­vey found EA org lead­ers val­ued their most re­cent ju­nior hire for 3 years at $1,050,000 (av­er­age) and $450,000 (me­dian). As­sum­ing 40 hours a week, 50 weeks a year, that val­ues an hour of ju­nior hire time at $175 and $75, re­spec­tively. For a se­nior hire, they gave $7,400,000 (av­er­age) and $3,000,000 (me­dian), which works out to $1,233 and $500 an hour re­spec­tively. While these num­bers may be over­es­ti­mat­ing the value, an or­der of mag­ni­tude less would still be $17.5 per hour for a ju­nior per­son and $120 per hour for a se­nior per­son.

What does an AC cost?

Now that you have an es­ti­mate of your time, let’s com­pare the value of an AC to other ways you can buy pro­duc­tive time with money. For these calcu­la­tions, I’m go­ing to es­ti­mate an hour is worth $30 (50 cents a minute). Your per­sonal value for time may be much higher (or lower if you’re cash con­strained right now).

Re­search on the im­pact of heat on pro­duc­tivity sug­gests pro­duc­tivity starts de­creas­ing at as low as 22°C (72°F) and de­creases by about 2% for ev­ery de­gree Cel­sius above 24°C (75°F) (Foot­note 1). This would im­ply that at 29°C, it would take about 4 ex­tra hours per week on av­er­age to get the same amount done (a 10% re­duc­tion in pro­duc­tivity). While ex­actly where your pro­duc­tivity starts de­creas­ing de­pends on your gen­der, it seems al­most cer­tain you’re not do­ing your top work if it’s blaz­ing hot in your office.

Let’s do some quick back of the en­velope calcu­la­tions. As­sum­ing that your pro­duc­tivity is re­duced by 20% per week when the tem­per­a­ture is above 35°C (los­ing 8 hours per week) and you value your time at $30 an hour, that heat caused you to lose $240 worth in one week.

A win­dow or portable AC unit costs around $300 on Ama­zon (plus up to $20 per week in elec­tric­ity) and can com­pletely solve the prob­lem (Foot­note 2). That buys time at about 35 cents per minute in two weeks of a heat­wave. If you have four weeks of heat­waves, your cost per minute saved goes down to 20 cents. After that, the cost of run­ning the AC for an en­tire week is more than paid for by sav­ing 1 hour.

If you re­ally don’t want to buy an AC, find a place that does have AC and work there dur­ing heat waves. You could also try work­ing in the morn­ing and evening, and tak­ing a break dur­ing the warmest parts of the day. Th­ese ideas ac­com­plish the same pro­duc­tivity benefit for has­sle in­stead of money.

20 cents per minute seems like a pretty good deal on time, given we started out will­ing to pay 50 cents. Let’s see how it com­pares to other ways you can buy time.

How much does it cost to buy time other ways?

Pay­ing for a laun­dry ser­vice

A laun­dry ser­vice that picks up your clothes costs $30-$40 a week based on a quick look at two sites, and I’m bal­l­park­ing that it would save about 30 min­utes per week (it’s hard to tell, since it’s in 5-10 minute chunks here and there). So us­ing the laun­dry ser­vice buys time at around $1.17 a minute. Pretty ex­pen­sive com­pared to our baseline of 50 cents.

Buy­ing Soylent

Re­plac­ing break­fast power smooth­ies with Soylent. Soylent is $3.25 per bot­tle ($2.53 if you buy in bulk with Ama­zon sub­scribe and save). It takes about 5-10 min and $2 to make a power smoothie with a similar num­ber of calories. So Soylent buys time at about 10-20 cents a minute. So ba­si­cally, you’re get­ting an awe­some deal on your time by drink­ing Soylent oc­ca­sion­ally. It’s like the Black Fri­day sale on time.

Eat­ing take­out

I’m es­ti­mat­ing $15 to buy a meal and as­sum­ing lef­tovers to be about an­other meal’s worth for my­self. So $7.50 per meal for com­pared to $2 per meal and 10 min­utes (based on 60min spent prepar­ing 6 meals in bulk). So at about $5.50 to save 10min, eat­ing take­out buys time at about 55 cents per minute, al­most break­ing even. (Note: There are other health con­sid­er­a­tions that may eas­ily trump the pro­duc­tivity gain, plus taste and va­ri­ety.)

Hiring a house cleaner

Our house cleaner is $25 an hour, and I es­ti­mate she cleans as quickly as I could. So this buys time at about 42 cents per minute, which does a bit bet­ter than break­ing even. (Avoid­ing par­tic­u­larly un­pleas­ant hours may be worth more to you than a nor­mal hour, how­ever.)

Tak­ing an Uber

The value of an Uber can vary a lot be­tween rides, but ba­si­cally it’s worth­while when you can save two min­utes for each ex­tra dol­lar you spend above what you would have paid for pub­lic tran­sit. A re­cent 30-minute Uber with 3 peo­ple cost us $28 ($16 more than the $12 the Bart would have cost), and saved 15 min. Split across 3 peo­ple, that works out to 36 cents per minute.

How do those com­pare?

If you have 4 weeks of heat­wave over the life­time of the AC, the AC is a bet­ter deal than any­thing ex­cept Soylent. If you only have two weeks of heat­wave, it’s still bet­ter than laun­dry ser­vice, take­out, or a house­cleaner.

Of course, the math may work out differ­ently for you. It’s likely that there’s sig­nifi­cant in­di­vi­d­ual vari­a­tion in the value for an hour, the de­tails for the above es­ti­mates, and how much heat af­fects you. Your calcu­la­tions may look sig­nifi­cantly differ­ent, so feel free to make a copy of my calcu­la­tions here and ad­just for your own in­puts.

I ex­pect a lot of the benefit of an AC to come at ex­treme tem­per­a­tures, which is where most peo­ple re­port a clearly no­tice­able differ­ence in pro­duc­tivity. This par­tic­u­larly true if you live in Europe, which is cur­rently ex­pe­rienc­ing its third heat­wave this sum­mer. July’s heat­wave broke at least four coun­tries’ heat records with tem­per­a­tures up to 108 °F.

If you live in a city where the tem­per­a­ture is above 35°C (95°F) for more than two weeks per year and you don’t work in an air-con­di­tioned space, you should prob­a­bly go buy an AC right now. For more mod­er­ate high tem­per­a­tures, say 26°C (80°F), it seems more likely you’ll be able to cool off with an open win­dow or a fan.

But even if you live in Alaska, you now know what your time is worth. Try look­ing for other op­por­tu­ni­ties to buy some time at a bar­gain.

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Foot­note 1:

https://​​www.sci­encedi­rect.com/​​sci­ence/​​ar­ti­cle/​​pii/​​S2542519618302377

Pg. 527

Work­ers’ health and pro­duc­tivity un­der oc­cu­pa­tional heat strain: a sys­tem­atic re­view and meta-analysis

“heat stress (defined as wet-bulb globe tem­per­a­ture be­yond 22.0 or 24.8°C de­pend­ing on work in­ten­sity”

“11 stud­ies with 8076 work­ers were in­cluded in meta-anal­y­sis three. The pooled pro­por­tion of in­di­vi­d­u­als show­ing pro­duc­tivity loss due to oc­cu­pa­tional heat strain dur­ing work in heat stress con­di­tions was 30% (21–39; ap­pendix). In ad­di­tion to the prevalence of pro­duc­tivity loss, seven stud­ies re­ported pre­cise changes in pro­duc­tivity as a func­tion of en­vi­ron­men­tal heat stress. Th­ese stud­ies sug­gest an av­er­age 2.6% pro­duc­tivity de­cline (in­di­vi­d­ual study es­ti­mates: 0.8%, 1.4%, 1.8%, 2.2%, 2.8%, 4.4%, 5.0%) for ev­ery de­gree in­crease be­yond 24°C WBGT.”

https://​​www.vox.com/​​2018/​​7/​​27/​​17611940/​​heat-wave-2018-cost-work­ers-deaths-health-cli­mate-change

“Economist R. Ji­sung Park re­ported that worker pro­duc­tivity de­clines by 2 per­cent for ev­ery de­gree Cel­sius above room tem­per­a­ture”

“Re­searchers at the Lon­don School of Eco­nomics found that ur­ban ar­eas also pay a price for high tem­per­a­tures, even among in­door office work­ers. They found that in Lon­don, a warm year could cost the city’s econ­omy up­ward of 2.3 billion eu­ros in pro­duc­tivity. Work­ers make more mis­takes and act more slowly as tem­per­a­tures rise above their op­ti­mal range.”

https://​​www.wor­ld­bank.org/​​con­tent/​​dam/​​Wor­ld­bank/​​doc­u­ment/​​Cli­mate/​​Cli­mate%20and%20Poverty%20Con­fer­ence/​​D2S3_Park_La­bor%20Pro­duc­tivity%20Im­pacts%20from%20Cli­mate%20Change%20-%20Feb%2010%202015%20v13short.pdf

Sum­maries of stud­ies on tem­per­a­ture and pro­duc­tivity which found “re­mark­able con­sis­tency in point es­ti­mates: (at least) −2% per de­gree C above room tem­per­a­ture.”

Slides 23 and 25

https://​​sci­napse.io/​​pa­pers/​​2461656268?fb­clid=IwAR0nRlDs8SEbtjnHiYl3L8YPfiKYz­iYdYK_z0ZCNSodeISGoPljJnx21iDc

Table 4

This tech­ni­cal re­port claims hourly work ca­pac­ity drops by 74-90% when the tem­per­a­ture is 37°C (98.6°F), com­pared to a baseline of 26°C (78.8°F).

Foot­note 2:

Utility costs, likely over­es­ti­mat­ing the monthly cost since Jeff’s elec­tric­ity is 3x the na­tional av­er­age.