I was decorating a Christmas tree with my wife and my in-laws the other day when we realized we didn’t have any metal hooks for ornaments. Without some way to attach the ornaments to the tree, we were stuck.
So I walked over to the major commercial strip in my neighborhood to try to buy some. I checked Bed Bath & Beyond — nothing. I tried Marshalls — nothing. The local dollar store? Nothing. Target? Nothing, plus crowds that would give anybody anxiety during Covid-19. After about 90 minutes, I returned home with a $1.50 box of ornament hooks I got at CVS, and it occurred to me that the time I wasted searching for the hooks was almost certainly more valuable than the negligible amount of money I spent on them.
Luckily, a new massive study sponsored by Lyft has arrived to tell me just how much the time I wasted was worth, dollar-wise.
The authors — Lyft data scientists Ariel Goldszmidt, Ian Muir, and Jenny Wang, and economists John List (the University of Chicago), V. Kerry Smith (Arizona State University), and Robert Metcalfe (Boston University) — conducted two large experiments using the Lyft app to test how much people in different cities across the US were willing to pay for their car to arrive a little bit sooner.
Access to Lyft’s internal data meant they had a data set of more than 14 million observations. (This Twitter thread from Metcalfe is a good explanation of the findings.) Basically, the authors varied prices and wait times randomly by giving Lyft drivers a few more minutes to reach a random subset of riders. The monetary value of time (VOT) is calculated by comparing how much people will pay to get a car earlier versus
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