Pricing Your Passions

Pricing Love, Marriage, and Divorce

According to the old saw, economists know the price of everything and the value of nothing. Since price and value are synonyms, the real point of the saying is that economists can price materials objects, but they can’t price feelings, like love.

As a dismal scientist, I have to object. We all can and do price love and other feelings on a routine basis. Unfortunately, we have to do this when it comes to making decisions like staying married or getting divorced that involve our emotions as well as our feelings.

Taking a Flyer on Fly Fishing

Every day is tough: John manages the control tower at O’Hare International in Chicago. Prior to 2005, O’Hare laid claim to being the world’s busiest airport. (Today, Atlanta’s Hartsfield airport holds that title.) The stress is enormous. But it instantly vanishes when John’s pursues his passion—fly fishing on the Fox River, which is just down the road from his home.

The 529 Solution

Mary Hinojosa and her husband Miles Sigwell have two children to put through college--Franky, born in 2001, and Juliet, born in 2006. They would like to continue the family tradition of attending Caltech in Pasadena, California, so they must brace themselves for the annual $50,000 it will cost for each child in tuition, room, and board.

Mary and Miles have good incomes and still have some time to save. But after putting pencil to paper, they realize that this is not a simple calculation. Here's what they want to know:

Given that the $50,000 annual cost (measured in today's dollars) will arise in 2019-2022 and 2024-2027, how much do they need to save and when not only to meet this bill, but to have a stable living standard before and after they get the kids through college?

Work Less Longer

Janet is a 55-year-old heart surgeon earning $250,000 a year, and she is burned out working every day. Her husband Jack is also 55, but he spends his days “birding” and has only a modest earnings history. Their 16-year-old son will head off to college to study ornithology in three years. Janet can’t take the work load much longer and plans to retire at age 60.