The Economics Of Skipping Class
I’ve recently read a number of articles, both on HackCollege and elsewhere, on the subject of skipping class. Some have attempted to determine when or how it is acceptable to skip, while others have attempted to determine the cost of skipping. I thought the idea of applying some basic economic tools and ideas to the problem might clear up a few misconceptions, and might even provide some intriguing results.
Central to economic analysis is the concept of “marginal” utility; that is, the specific benefit or cost of the very last unit, whether of time, money, or whatever else. For most things in life, marginal utility is decreasing. For example, we might prefer sleeping to going to class, but the value from our twelfth hour of sleep might be less valuable to us than our sixth. It might even be true that the twelfth hour of sleep is less valuable than an hour in class. When considering questions in economic terms, it is important to remember that we are operating on the margins.
One of the the most important factor in determining when one should skip class is the cost. Nathan Falk and Katya Abazajian of Claremont McKenna College have an interesting breakdown of the price of skipping classes in terms of forgone tuition. But this understanding of cost falls prey to a common fallacy. Tuition is a perfect example of what economists call a “sunk” or “fixed” cost. Once we have paid it, we should not let it influence our decisions in the present. Rather, our decisions should depend only on what will maximize our utility in the future.
Instead, we should consider the “opportunity cost” when making decisions. The opportunity cost is the value or utility of the most valuable thing we forgo as a consequence of our decision. For our eight a.m. class, that might be an hour of sleep; for a three o’clock class, it might be sitting around doing nothing in the library; for a five o’clock class, it might be dinner with friends. Whatever the opportunity cost is, that is what we must consider when making decisions such as when to skip class.
One of the classic problems in microeconomics is the consumption-leisure trade-off, represented by the mathematical model:
u(c, l) such that w(T -l) + y
Where w is wages, T is time, l is leisure, c is consumption, y is non-labor income, and u(c, l) is a function representing a given individual’s preferences for consumption and leisure.
For those of you who get a knot in your stomach at the sight of a formula, fear not: this model is just a theoretical approximation of a rather simple idea. Everyone wants to spend more, while also wanting to spend their time doing as they please. Yet people have a finite amount of time. So the purpose of this formula is, given an individual’s personal preferences for consuming versus their preference for engaging in leisure, how much time do they spend working for a given wage—which takes away from their leisure time—in order to have enough money, along with any additional non-labor income, to consume what they want. Simply put, it’s about balancing preferences for leisure and consumption, which requires working, which takes away from leisure.
With a few simple changes, we can use this same model to determine when we should skip class (yes, I said should). First, we can replace the idea of consumption with that of “consuming” or “purchasing” a grade, Next, let us assume T is our total time, y is how much we know about the subject from factors other than going to class—previous knowledge, independent study, reading the textbook, etc.—and w is how much we actually learn from going to each individual class. We don’t need to actually write out a preference model or solve the utility maximization problem, but if we use the idea behind the model to perform a simple analysis each of our classes, we can determine which lectures to skip and which we’d better attend.
An honest analysis (there’s really no point in lying to yourself) may lead us to some interesting conclusions. For one, our decision whether or not to skip class depends on the value we place on that on that specific unit of time, and how much we “earn” towards the grade we want. It has nothing to do with tuition, or whether we strictly prefer spending time in class or elsewhere, and everything to do with what we give up while sitting in class. We might even find instances where we are better off skipping class—in order to maximize your utility (which is what microeconomics is really all about), you should follow the model when it tells you to go to class and when it tells you to play hooky.
Like any economic model, this is only an approximation. It makes assumptions that may not be entirely accurate, and ignores several real-world problems, including that of asymmetric information (where one party in a transaction knows more than the other). We may not know the “price” of an A or exactly what w is. But this is something we must take into account.
This is by no means a rigorous economic analysis of skipping class. It is, however, an interesting way of looking at and modelling the trade-off involved. I hope it cleared up a few common misconceptions as well. Keep hacking, and remember: ceteris paribus, go to class.
About the Author: Jacob F. Grant is a current economics student at UC Berkeley, and writes about politics, economics, and religion for several campus publications. You can read his thoughts (when he bothers to write them down) at jacobfgrant.wordpress.com