Back in May of 2002, I read a story on CNN about how a professor came up with a formula for caclulating the value of your time. The formula is: V=(W((100-t)/100))/C, where V is the value of an hour, W is a person’s hourly wage, t is the tax rate, and C is the local cost of living.
It shows that there is no such thing as a free lunch, and that by washing your car by hand as a hidden cost.
The professor illustrated how this equation can show people how valuable their time really is in relation to any task they need to perform. As he put it, “…it can judge the financial cost of a takeaway against the time taken to cook dinner, or the relative benefits of using a taxi or saving with the bus. Traditionally, wages or salaries have given an indication of how we are valued at work, however, by looking at salaries against taxation, the cost of living and regional variations, we can see how much one hour of time is worth whether at work or home. What this helps us understand is that as the value of our time rises, we are likely to buy more of it, which explains why people are paying to save time, like having someone to cut the lawn or clean the house.”
Article:
http://archives.cnn.com/2002/TECH/science/05/29/time.money/index.html