Voluntary work - Part I, Opportunity cost
Wednesday, August 8th, 2007This is the first part in a series of posts about volunteers and the constraints underlying volunteer management.
Economists think differently. Let’s say you buy a bottle of water at a local store for $1. Let’s also say that for the sake of argument tax is already included so the financial cost of this bottle to you is exactly one dollar. To most people, that’s all there’s too it. You have a bottle of water more in your hand and one dollar less in your wallet. The shop keeper has one bottle less on his shelves and one dollar more in his cash drawer. End of story. But like I said, Economists think differently. Because what this view ignores is the opportunity cost involved in this transaction. (more…)
