The economics of buying a chainsaw highlights some of the ideas on how to value time. How do I calculate, cost, benefits and lost opportunity and what should I consider as leisure, exercise, entertainment time versus labor? For the issue at hand, there is a forest abutting my back yard, and with the recent wind storms a few downed trees. They could lay there for a few more years, but on the other hand they present and eye sore in the other wise organized forest. Second, winter in coming and I am down to around 1/2 cord of fire wood and will need roughly another 1/2 cord to make it through. Market price around here for a full cord delivered is $180 give or take. The chain saw I want is a sparkling new Husqvarna 40cc for around $350. Not considering labor it is a 2-year pay back on the wood alone.

There are other factors though. For one, I like doing yard work and spending time in the woods. Being outside, throwing on the coveralls and getting muddy is definitely a benefit. Running a chain saw is fun as well, (positive marginal utility), though I am sure I would feel differently if I was a full time lumberjack (downward sloping utility curve). Lets assume it is safe and I am somewhat skilled. The exercise involved is fairly high, probably 8 to 10 hours to cut, move, split ½ cord. So I list this as a benefit. Then there the satisfaction part afterward of looking at the neatly pilled wood stack and the peaceful spot in the woods where the dead tree no loner resides.

Opportunity wise, I could always be doing more research as a trader, or spending time with my family, the later being the most important. So there are costs there, but time in nature has benefits as well, like long walks, swimming, rowing.

Add it all up I am leaning strongly toward making the purchase and heading out to the woods this holiday. If anyone has any good arguments for or against let me know.

Craig Mee writes: 

Chainsaws and markets… mmm!

This reminds me of a young broker years ago who went on his first interstate trip. On arriving in Melbourne, Australia, he went to take a bank client out to lunch. The client says "let's forget lunch, and hit the hardware store for a spot of shopping" ! Well he promptly got the young guy, who didn't know any better, to buy him the latest chainsaw with his company Amex…and once the client's boss at the bank found out, the client promptly got fired!


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