From consumer to producer

S. and I have been doing a lot of stuff for ourselves lately such as raising our own food, making our own stuff, learning skills to make more of our own stuff, etc.  Most of this we do because we enjoy it (in my case, baking bread and brewing beer), while other things we do because we have to (house cleaning and chicken killing come to mind).  This new lifestyle is a lot of work, but, at the same time, it is very satisfying.

I know it's a little sad, but the scientist in me would like to quantify that satisfaction.  So I sat down this afternoon to compute exactly how satisfying this type of stuff is.  I wanted to know how, as a producer, we were impacting our economy.

My first inclination is to scale up our activities and ask "how much would we have to produce to make a living doing this?"

But that misses the point.  I don't want to be a goat farmer, I want to be a physics professor.  I like, and occasionally love, my job.  I don't want to figure the economic impact by what it would take to bring my produce to market.

Then I noticed something: the more S. and I produce, the less often we go to "the market".  So there is a dollar value associated with our produce.  It is the value of the dollar we didn't spend buying something at the grocery store.

The calculation is pretty simple.  I figured out how much it cost me to, say, bake bread, and how many times a year I do this activity.  Then, I calculated the market value of the product that I didn't buy because of the activity.  Since I've gotten pretty good a baking bread over the years, my product fetches the premium artisan price (as does our cheese, milk, beer, nightly dinners, etc, but I have I high opinion of the stuff we make).  I also factored in the labor involved to make it, with one caveat: if we do the activity for fun, the labor costs are zero.

Luckily, I love to bake bread.  I also love to milk goats, raise chickens, make cheese and brew beer.  So, labor costs are pretty minimal.  I don't, for example, like to clean the house, but since I work in a small regional state-run university, two hours of my time is still less than the weekly cleaning fee to hire a housekeeper, so I still come out ahead on that one over the course of the year.

The result?  Something like the equivalent of 12 weeks of "work" are saved by doing this stuff ourselves.  Another way to think about it: I could work 12 fewer weeks with the money "saved" from producing our own stuff.  Or, since I can't do that, I have freed up 12 weeks of "salary" to put toward other stuff.

Side Note: The most profitable thing I do all year is brew beer.  A pleasant surprise.

There is one problem with this exercise.  According to the economic wizards, by saving money and producing for ourselves, we are actually hurting the economy.  But I suppose our "produce" has not been tabulated in the GDP.  Maybe I should forward my spreadsheet to the Fed.

S. read me a quote the other day:

"A dollar earned is 70 cents...a dollar saved is 100 cents"

What is the value of a dollar produced?