Time’s a ticking

The life expectancy of an Australian male is 78.7 years, and for a female is 83.5 years.

It is said that death is the great leveller, but really it is our time alive that puts us on a level playing field. Two people might have vastly different wealth, power, intelligence, or other desirable qualities. However, if those two people are of similar age and health, they will have roughly similar time left available to them in their lives. A hour from one from them is about as precious as an hour from the other.

While exchange rates fluctuate, money one day may be worth half as much the next day, or twice as much. But a person’s time has steady value, and is consumed by them at a constant rate of one hour every hour, while everyone gets the same 24 hours in any particular day.

But it can’t be invested. You can’t deposit a week into a bank, and pull out two weeks later on. The balance of years, that for everyone at birth is roughly the same, can only decrease.

Despite its lack of tangibility, time is probably the most valuable thing that any person can give to another.

Time is very special. But it seems to me, that these days, there is less time to share around. This observation has been given some weight by recent research from Robin Dunbar and Sam Roberts.

Dunbar and Roberts found that while people typically start with five very close friends, after developing an intimate relationship, their friendship group reduces to three very close friends plus the one romantic interest. If the new love was outside the original friendship group, then there are two people who are no longer very close friends. The time consumed by the lover doesn’t leave enough to maintain all the previous relationships at the same level.

I know of people that I’d consider exceptions to this, but in general, it seems to ring true. People have a little less time for close friends when they start serious dating.

Similarly, my personal experience has been that having a young child consumes not insignificant amounts of time, and I certainly don’t spend as much time with friends as I used to. With a second child on the way, I can see more of my 24 hours being spent with the kids than before.

It’s hardly a unique observation. A quick web search picks up similar thoughts elsewhere.

Still, I hope that my old friends don’t feel too badly that I am not chatting to them or seeing them as often as I used to. My only recourse is to fall back to social networking tools like Facebook or Twitter, and blogs too, of course. Through these I can share an, admittedly small, amount of time across a large number of friends.

I also hope they know that the time we share together online is time that I value highly. It may not be as high-bandwidth as time shared in person, but I value every bit.

It would be great to get more time. But from where?

Life expectancy trends show that we’ve gained about an extra 22 years over the last century. This is due to things like decline in infant mortality, better control of disease and treatment of illness, and healthier lifestyles. It will probably continue to increase little by little, but it’s not going get a sudden bump of 20% or more.

A significant amount of our time alive is spent unconscious. Apparently we spend a third of our life asleep, so if some of that could be reclaimed as awake time, as much as 33% more hours would be available to us. Drugs such as Modafinil and Orexin appear to offer such a promise, but it’s unclear what long-term side effects would result from significant reduction in sleep time, and besides it would also devalue the worth of an hour. If they became popular, anyone not taking the drug would have comparatively fewer hours to offer and find time management even more of a struggle.

An alternative, drug-free way that may offer significantly more time in your life is a practice called caloric restriction. The idea is to consume 10% or more fewer calories in a day than average, and this will make you life longer. Or perhaps it will just feel longer. Certainly, it is a risky practice, but apparently has been shown to work with fruit flies, mice, rats, fish and monkeys. Definitive human results have yet to come in, because, of course, we live too long.

If we do manage to find more time, it will be interesting to see whether Dunbar and Roberts’ findings change. Perhaps people will have more friends. Or perhaps they will have more lovers.

In any case, it’s time for me to spend some of my remaining time in some much-needed sleep.

Objects, Transactions and Value

This is a topic that I’ve been mulling over in my head for a little while now, but hang in there with me as I stumble through it, because the conclusions aren’t fully formed.

I’ve noticed that often the concept of the value of something is linked to its price. If someone is willing to pay $50 for an object, then it is considered that they value it as worth $50. If we add up all purchases across a country, it is equal to that country’s GDP, a measure of the value created by that country in that year.

However, the aspect of valuing things doesn’t sit well with me. When I buy something, I don’t feel that the more I pay, the more value I’m getting. In fact, the reverse is generally true, and I imagine most people feel the same. Also, I think different people may place different values on an object, even if they pay exactly the same price for it. It seems that price doesn’t explain value, at least not completely.

Another explanation that has occurred to me is that value is not tied to an object but to a transaction. Clearly a transaction (between a willing buyer and seller at arms-length, etc.) will go ahead only if it generates value for both parties. Otherwise there’s clearly no point. And there are obvious cases when a transaction won’t go ahead: when the price is too much for the buyer, or if the price is not enough for the seller. So, this gives us a framework to identify how much value is being created.

Value of a transactionExcuse my poor excuse for an illustration. Hopefully you can see that ‘A’ is the difference between the price of a transaction and the most the buyer would’ve spent, and ‘B’ is the difference between the price and the least the buyer would’ve accepted. So, in this interpretation, the value of the transaction to the buyer is A, then value of the transaction to the seller is B, and the overall value created by the transaction is A + B.

Out of A and B, it is probably B that is the best understood. In some way it corresponds to the seller’s profit, or perhaps risk-adjusted profit. But not always, since the seller may be willing to make a loss in order to recover some money for their stock. So, in this version of value, based on the fact that a transaction will occur only if both parties see some value in it, a technical loss (sale price less than nominal cost) must still be value positive.

The value A is not easily described since most people don’t explicitly calculate the most they would be willing to pay for their milk, eggs, petrol etc. and are even less likely to tell you about it. However, one exception is in auctions. (Hopefully) most potential buyers at an auction have figured out the most they would be willing to pay. Although, their upper limit may be more influenced by the amount of money at their disposal than by the benefit they will gain through possessing the item. (It may turn out to be impossible to accurately estimate A in most situations.)

As mentioned before, the overall value created from each transaction is A+B, which is also the difference between the most the buyer would pay and the least the seller would take. This number is independent of the price chosen for the transaction, and is clearly “better” the more the expectations of the buyer and seller diverge.

It would be interesting to see what figure we’d get if we added up the A+B numbers for all the transactions that occurred in a country for a year, and compared it to the GDP. I think it would provide a more accurate representation of the economic value created.

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