Saturday, October 20, 2007

Total Cost to Society

Life is full of choices. Every day you're confronted with different paths that you must choose from. These go from "should I do the dishes now or do it later" to "should I quit my job". When you're about to make a decision it's important to be able to quantify each different outcomes.

Now, there a tons of ways to quantify the effect of a decision but the ones I use most often are money and time, which some would argue is one and the same, simply because they're the easiest to work with. Happiness would be a great quantity to measure but it's very difficult to do so, yet it can often be a used as a multiplier.

It's often relatively easy to quantify how a simple decision will affect you, but it's harder to see how it affects other. I guess it's part of being human, we always want to put out interests first. So I've developed a system that I've been using for a long time in my head without ever formalizing it. Well, now is the time to give it a name and purpose.

I've decided to call it Total Cost to Society(TCS), which is a bit of misnomer because it's very individual-centered. I reserve the right to change the name once I find something better. TCS aims give a certain measure of the effect of your actions on yourself and everyone else around you.

I expect it'll take a few posts before I can fully explain the concept but I'll ignore a lot and give a simple example.

Let's assume everyone's time is worth exactly the same in every circumstances and there are no monetary costs to different options.

I don't have a car, never have (though I'm thinking of buying one, I'll do the analysis soon, should be fun). I'm going to a friend's place that is slightly far away. By mass transit this'll take 30 minutes of subway and 60 minutes of bus, for a TCS of 90 minutes. My other option is to ask my friend to come and pick me up (he, on the other hand, has a car). It's a 35 minutes ride in a car, so my friend will take 30 minutes to come to my place, and then both he and I will take 35 minutes to go back to his, for a TCS of 105 minutes.

In this case, it's clearly a better choice to take mass transit. But we should look at other options. After taking the subway, I'm now only 15 minutes away if I get a ride. In this case the TCS becomes 75 minutes. Great! Of course I'm omitting tons of stuff such as the cost of public transport and gas, the relative value of everyone's time and much more.

I hope to go over that example in more details as I go over several different concepts.


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