I enjoyed Freakonomics (the book) quite a lot, but Freakonomics guest blogger Daniel Hamermesh does a pretty good job of blurring the line between economic inquiry and outright crackpottery. I first noticed his predilection for the latter when he tried to tar everyone who doesn’t agree with his own extreme views (which he tries to reify as “standard analysis”) as an incentive hater (i.e. communist). Then he made the absurd assumption that people would respond to a bottled-water ban on college campuses by drinking soda instead – an idea which many people pointed out was absurd in many ways. Now he doesn’t want to turn off his computer, so he’s making up more stuff.
The article says that Americans who leave computers on overnight are wasting $2.8 billion on energy costs per year.
It ignores the cost of turning computers off — and having to turn them on again the next morning. Let’s say that process takes five minutes per day, and one does it 250 days per year. That’s 1,250 minutes, or more than 20 hours per person per year.
Assume the average computer user’s wage is $21 per hour, …
Notice the pattern here? Anything that might cause him to change his behavior – e.g. with regard to jaywalking, refreshment choices, or computer use – is treated as an attack on economic rationality, which we should all apparently recognize must be the sole cause behind his current behavior. Furthermore, any such attack can be met by making a bunch of convenient assumptions, presenting them as fact, and then tossing out a bunch of numbers like chaff to distract from the more fundamental cognitive errors. (Actually that’s Chicago School in a nutshell, isn’t it?) For example:
- Assume that the computer must be turned on every day, to maximize the time spent booting.
- Assume that the user is absolutely helpless during that time, e.g. unable to turn on the computer before taking a shower or pouring coffee, to maximize the cost associated with that time.
- Ignore costs associated with leaving the computer on, such as shortened component lifetimes or more time for the worm of the week to infect your system.
The real number, Professor Hamermesh, is more like five seconds per day, maybe fifteen if you’re smart enough to require that users log in. Using your own numbers for the rest, let’s call that $7.29 per person per year, or $365M for 50M computers for a year. That’s not 2.5 times the alleged power savings from turning computers off, is it? Try 13% instead. Even better, here’s some real economic analysis for you. At one third of $21/hour, and an energy cost of $0.10 per kilowatt-hour, fifteen seconds of your time turning the computer on and logging in corresponds to leaving it on for eight hours at 3.6W. Even using the most modern power-saving sleep modes and such, how many computers (all components included) consume less than 3.6W? Very few indeed. In other words, this has nothing to do with any “environmental savings uber alles” strawman that Hamermesh made up. Even in the narrowest possible sense of direct power cost to the consumer, ignoring everything else from the cost of generation and transmission equipment to effects on environment and geopolitics, turning computers off is the economically rational choice. Where does that leave our beloved paragon of rational behavior?
Nowhere. Or the University of Texas economics department. Comparisons between the two are left as an exercise for the reader.