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There's no such thing as a free Italian ice
Yesterday was the first day of Spring, which means the line for Rita’s Italian ice was dozens deep throughout the day. I drove by our local store in the evening and saw at least 30 people waiting in line for a cold scoop of that tasty frozen treat. I’m not sure what surprised me more: the fact that people were waiting in such a long line for a “free treat” that only costs about $4 on any other day or that they were waiting in line for a frozen treat while it was in the mid-40s. I thought about stopping to ask them why they were doing it, but I figured it would be easier to write this week’s newsletter on why those “free treats” aren’t really free.
Opportunity cost has always been one of those foundational concepts that changed the way I approach most decisions in my personal and professional life. I find myself regularly thinking about what else I could be doing with my time, especially when I have a lot of looming deadlines or if I’m stuck in a meeting that doesn’t seem to have an end in sight. While it’s been a pivotal concept in my own life, I’ve noticed that the concept seems to be constantly ignored by lots of other people. Most people have heard of the phrase “there’s no such thing as a free lunch,” but it seems a lot of people are lost on what that really means for decision-making.
Every decision you make, even if it seems inconsequential, has an opportunity cost associated with it. The cost of anything you choose to do is the value you would have received from the next best alternative. This isn’t to say that every decision is a bad decision! It really just means that even that “free dessert” isn’t actually free. It may not require you to hand over any money, but there’s still a cost associated with getting to the store and waiting in that line:
The whole “waiting for free stuff” issue isn’t exclusive to Rita’s and I know my students aren’t the only victims of ignoring opportunity costs. You may find yourself waiting in line as Dairy Queen hosts their “free cone” day today (March 21, 2022) or in a few weeks when Ben & Jerry’s typically hosts their “free day” the second week of April. You may fall victim to it when you head to one of a number of chain restaurants that offer specials where “kids eat free” on certain days of the week. If you’re in the Pennsylvania area, you can stop by Knoebels, which bills itself as “America's Largest Free-Admission Amusement Park.” None of these are really free.
Each has a cost associated with it, whether it’s the time it takes to get there, the time you spend waiting in line, or the price of all of the other things you have to buy in order to get the “free item.” If you value your decision more than the value of the next best alternative then you’ve made a good choice. Since there’s always something else you could be doing, standing in line for 15 minutes in the evening means you give up the opportunity to work on homework or hit the gym. The value of those things you could have been doing is the opportunity cost of waiting in line.
While these events are specific “one-time” events, the concept can apply to other things you may do on a regular basis. Don’t have enough time to read all the books you want to read? You may need to think about opportunity costs more carefully. Do you spend a lot of time each day putting pillows on and off your bed and ever wonder what else you could be doing? You may be starting to think more carefully about opportunity costs or you’re Ben Stiller in Along Came Polly:
So why do people still do it? Why do people wait in line for 30 minutes and then brag about getting free things? Maybe they don’t understand economics. Maybe their next best option adds close to zero real value to their day. I’m more inclined to believe that people undervalue their time. It’s only after we’ve wasted 30 minutes in a line that we realize it was a waste of time. We’re not as good at making that calculation before we start standing or each action seems so small that we round down to zero.
If you’ve made it this far in the newsletter, thank you for allocating some of your time today to reading this article and believing that it’s a better use of your time than the next best alternative.
There are 191 Rita’s Italian Ice locations in Pennsylvania, the most of any other state [ScrapeHero]
Rita’s offers 95 different flavors of Italian ice, but they rotate each day [Rita’s]
Dairy Queen soft serve has 5% butterfat, but the FDA regulations require “ice cream” to have a minimum of 10% butterfat [Forbes]
About 6.4 billion pounds of ice cream and frozen yogurt were produced in the U.S. in 2019 [International Dairy Food Association]
There are 525,600 minutes in a year [Rent]