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# Numbers

## The True Cost of a Date

Let’s say you’re an average guy in the prime of his life (me). You’re single (not me) and gainfully employed (kind of me). According to the latest numbers from the CPS, you make just under \$60k annually (\$58,815 to be precise). Sounds nice, but you give back about ¼ of this in income tax, social security, medicare, and to the cushions of your IKEA sofa. So, in reality, you have about \$44,111 of disposable income in your pocket. Since you’re Mr. Joe Average we also know (thanks to the nice people at the BEA) that you have a personal savings rate of about 4% of disposable income and, according to the BLS, you’re likely to spend another 33% combined on shelter and food. All said and done, you’re left with just under \$28,000 big ones to spend on frivolous things (like dating). We’ll call this your adjusted disposable income.

Let’s say you’re the 1 in 33.33 adults who is actively dating. You’ve managed to snag a first date with that nice girl in accounting (who may appreciate this analysis, by the way). You’re feeling pretty good, right? Wrong. And here’s why.

Since we’re dealing with averages, we’ll assume the traditional dinner and a movie scenario. You’re looking to impress your new friend so, naturally, you’re paying. A nice meal and drinks for two at a decent restaurant, with tip, is likely to run you about \$100 even. Two movie tickets, plus junior mints and drinks: 25 bucks, give or take a few. Throw in another \$5 for cab fare, parking, gas, whatever, and you’re looking at a cool \$130 for a shot at Ms. Right. Not bad you say. Ah-ha! But this is only half the story. As you’re taught in econ-101, every action in life comes with an opportunity cost—i.e. the value of what you’ve foregone in favor of whatever it is you’re doing. A simple way to think about opportunity cost is to think of it as time, and, as we learned from Benjamin Franklin (or was it Puff Daddy?), time is money.

So, how can we estimate the opportunity cost of a date? A common trick employed by economists is to use our hourly wage as a proxy for the value we place on time. The logic is pretty simple: Utility theory posits that if I’m a rational (we can debate this later) and self-interested consumer my goal in life is to maximize my utility (benefit, happiness, pleasure, smiles…) or, at least, to optimize it given certain constraints (the need to pay child support, for instance). I derive utility from leisure and disutility from labor—so, it follows that my opportunity cost of working (labor) is equal to the pleasure I derive from, you know, doing whatever the heck I want (leisure). When working, I am essentially selling my leisure time for whatever price my boss and I agree upon. Therefore, we can approximate the dollar-value that I put on an hour of my time by the amount at which I am willing to sell that hour to an employer. This is of course an imperfect measure. Among other things, it assumes that markets are efficient and I eventually find the equilibrium point where the wage I receive exactly cancels out the disutility of my work (and it doesn’t at all recognize the fact that I may derive more pleasure from work than leisure—how irrational that would be!). Regardless, it’s a useful approximation and not too far-fetched. Good enough for us to use here.

Back to our dinner-date: This may be wildly unscientific but, in my personal experience, you’re a magician if you’re getting through dinner and a movie in less than four hours. At \$58,815 per year you’re making just under \$30 an hour, so we can estimate the opportunity cost of your date to be another \$120. Bringing the total cost of your date to around \$250 (boy, was that convenient, or what?). So, how much is that? Glad you asked! This is nearly a third of what you take home in a week after taxes and just about 1% of your adjusted disposable income, for the entire year! And, if things go well, this will be just the first of many such precious engagements. And by, “go well” I mean: four hours with her must be worth \$250 or more. Otherwise, utility theory says you’d stay home and watch the Red Sox.

Now, while you ponder whether or not to head over to accounting, consider the following:

The odds a woman has had sex on a first date are 1 in 6.06.

…If this is all you’re after (shame on you) you’d need to value sex at \$1,515 for this to be a worthwhile gamble. Otherwise, a better investment shouldn’t be too hard to find:

The odds a woman has ever paid for or been paid for sex are 1 in 49.26.

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anonymous

This is a poor analysis. Unless you have multiple jobs to stuff your day with work, your job provides ample leisure time. During that time you won't be making money anyway. For example, a teacher who comes home in the afternoon and goes on a date makes the same amount as if they came home and watched t.v.. There is no opportunity cost if you date in your free time. And a 100\$ dinner is an overestimate unless your both getting drunk, or you take her to an exceptionally expensive restaurant.

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anonymous

however you look at it .. its still cheaper to get a hooker or go to the rub-n-tug on a weekly basis

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IStan

@last couple: guys/gals, wage is just a convenient (and semi-logical) way to impute your value of time - which is an inherently subjective thing. We're talking about value, not a direct transfer of work-time to date-time. It's simple arithmetic: if you value A at \$10, but forgo A in favor of B, then you must value B at > or = to \$10. We're simply using your wage to approximate a \$ value of A.

This is not a rigorous analysis and it's almost entirely tongue-in-cheek. I love going on dates. :P

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anonymous

and ps, i'm a true yankee fan. kiss my butt red sox!!

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anonymous

WOW. apparantly it doesn't occur to men how much women spend on a potentially good first date. there's clothing (must have the right outfit/shoes), manicure, pedicure, waxing.. we're talking about well over \$100 right there. personally, if i'm on a first date i ask to split any check, as i don't want to feel indebted or greedy. so fellows, you're not the only ones shelling out, whether it's by the hour or the evening.

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anonymous

Well, that's kind of cute, except:

1. The opportunity cost assumes that if I'm not going out on a date, then for that 4 hours on Saturday night, I would be working and getting paid. I don't know how you spend *your* free time, but that's not the case for me.

2. The fact that dating is so expensive and yet we do it constantly anyway indicates that the analysis as stated has zero explanatory value. This intellectual wanking in Fairyland is why economics has failed over the past ten years. How can we change the model so it reflects and explains the behavior of actual humans?

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anonymous

Interesting and a fun read, though I wouldn't compare the opportunity cost of the date to annual income, since you aren't spending the forgone income -- the comparison implicitly mixes up economic and accounting costs.

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anonymous

Haha, I think people all of these average people are taking their statistics way too seriously.

That being said, I really dug the analysis!

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anonymous

don't buy it. we get future benefits out of dating that are relevant--even though economists discount future benefits into present value. if you really wanted to do a cost-benefit analysis of dating, you'd need to model the probability of all possible benefits from that date (future sex, future dating, future marriage), assign them an economic value, discount them (presumably at the rate of interest) into present value and then compare that against the cost of the date plus the opportunity cost. if you did that i'd be willing to bet going out on the date seemed like a steal (assuming the probabilities of those future benefits are high enough, which we call, in english 'getting along with someone').

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anonymous

yeah and maybe women can start making more money than men for doing the same ******* job. suck off and buy me dinner.

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anonymous

I've never been a fan of considering every leisure activity one engages in as lost income, as most of those activities are done after work when there is no possibility of you getting payed anyway (unless you're self employed, have a side job, or are a drug dealer). But we could argue this point all day I'm sure. As for utility, it doesn't get much better than sex... we're evolutionarily programmed to strive for it. We want to procreate (and live and eat, but if you're making 60k/year, those are taken care of so sex is priority numero uno). I guess what I'm trying to say is just get her a happy meal and share a bottle of \$10 tequila, and if you don't get any, at least you'll be drunk. Happy hunting :)

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anonymous

I agree with the poster who pointed out that you didn't account anything for the woman's opportunity cost. If she's an accountant, for all we know, she could be making more than you - and losing as much as \$220.81 in lost wages (before tax).

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anonymous

"disregard females, acquire currency" you wonder why lots of dudes think this...
but really this is depressing. if women really "want" to be equal then they should start absorbing some of this cost and also initiate dating as well. I'm all for womens rights but y'all gotta step up in 2010 and beyond
PEAS
(PS, why does my captcha say "dislikes china"? haha)

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anonymous

If the cost of dating is so high, it's obviously not something to trifle with. Does that put participants into distinct categories: those "playing for keeps" and those "playing for sex?" If so, would "sex on the first date" be an indicator of the other person's lack of (long-term) interest in you? Could that person be signaling the nature of the relationship or even attempting to capitalize on the sunk costs of the date?

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anonymous

If the cost of dating is so high, it's obviously not something to trifle with. Does that put participants into distinct categories: those "playing for keeps" and those "playing for sex?" If so, would "sex on the first date" be an indicator of the other person's lack of (long-term) interest in you? Could that person be signaling the nature of the relationship or even attempting to capitalize on the sunk costs of the date?

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anonymous

There is another concern - the food is presumably of value to the person as well, which will probably balance things out even more.

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anonymous

You allocate approximately zero minutes of time tradeoff for the actual sex. My condolences.

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anonymous

the general interpretation in these comments is waaaay too literal IMO. I think the point is: you value time at a certain amount. we can never know exactly what that amount is, but we can guess at it using your wage. So, when deciding to do things, you're making a value judgement: is this activity worth \$30 or more to me? If the answer is no, then you conclude "my time is too valuable to do this, I am going to look for something else to do that I do value at \$30/hr or higher." So, if the date doesn't return a certain aggregate value that meets your internal value of time + expenses then you shouldn't go on the date, you should find something else to do that DOES return equivalent value, like watching your fav sport or commenting on blogs. You guys are getting hung up on this direct work for play transfer, which seems beside the point to me.

I think that is what he's trying to say, anyways.

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anonymous

Based on your numbers, staying home and watching the Red Sox itself should have an opportunity cost of \$120 if the alternative is to work, so the cost differential between going on a date or watching the Red Sox is \$130, not \$250.

Is it really correct to use the gross wage when calculating the opportunity cost? I'd think the after-tax wage would be more appropriate.

Also, you obviously eat at more expensive restaurants than I do.

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anonymous

Other posters have commented on the confabulation of opportunity costs and prices, so I'll leave that to one side, except to say it is not standard decision analysis.

The article also VASTLY underestimates the value of the date, assuming the rather unreal position that the prospect of sex is the only payoff.

1) Sex-per-date probability is not calculated properly. A date may not lead to sex directly, but may set up a a successful subsequent date.
2) The number of times you get sex. A date leading to a successful relationship may generate many hundreds or thousands of sex events.

A better way of doing this whole calculation would be to calculate expected cost for establishing a relationship via dating, and the mean number of sex events in a relationship (of mean duration).

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anonymous

I think your estimate of how much dinner costs is non-trivially too high for your average first date, though your estimate of transportation costs is probably too low.

Either way, even if we accept your final number as being ballpark correct, people are unaccustomed to incorporating opportunity cost into a price, so the sticker shock is probably misleading. If your frame of reference is that watching a football game on TV and then jerking off into a towel costs something like \$120, suddenly \$250 sounds quite reasonable. Actually, that's roughly the cost of sleeping eight hours by your metric.

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IStan

Would love to hear some ideas for other easy ways to approximate the value of time - leave them in the comments if you have any!

@ 2 down - is the slope for marginal utility positive or negative? I guess the goal is to figure that one out by the end of the night, eh? A decision rule: If positive, call in 2 days. If negative, "lets just be friends." If 2nd d is positive, drop to 1 knee and make it official ;)

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anonymous

So you're comparing prices including opportunity costs to actual wages? How does that make sense?

And this opportunity cost calculation is not a good approximation, it's a very bad one, because very few people actually have sufficient control over their access to employment to achieve the assumed balance. Consider this: would you be willing to work Wed and Thur evenings to get the evening you describe on Fri? I bet you the lonely single people seeking dates would!

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anonymous

You’re computing average utility without considering marginal utility. A date may be worth \$125/hr if it’s only 2 hours, but not if you’re spending a week with the young lady.

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anonymous

My last date, which cost me \$20, ended in sex and a series of follow-up dates-- ultimately rounding out to a nice friendship. I'm no econ-guy and can't speak the language, but \$250 for a date is a bit off. Why spend up front like that?

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anonymous

You must all be blokes...no-one noticed that he didn't take into account the woman's opportunity cost (perhaps partially compensated by a "free" dinner and movie). This date is getting really expensive!

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anonymous

If you don't get laid, and/or enter a meaningful relationship -- such as often ensues after dating -- work will eventually become a tiresome chore, you will lose your job, existence itself will become meaningless, and you will place a higher value on auto-euthanasia than you thought possible.

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IStan

@below - really interesting point!

@the previous four - ha! you guys are pretty sharp.

@jonathon - I wish our impact were bigger! thx for reading

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anonymous

Wait, you talk about spending leisure time (worth \$120) but only value income. If you're going to put a value on using your leisure time for a date, you also have to include the value of all your leisure time in your 'income'.

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anonymous

All this shows is how much people value sex and a chance at reproduction

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anonymous

Therefore, cities that want to improve population growth and citizen happiness should offer more free activities.

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anonymous

You're computing the opportunity cost of the marginal date--one well after you've taken the girl from accounting out. That first date is worth a whole lot more.

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anonymous

The first date is an investment in getting a girlfriend with whom you can consistently have a wonderful time after cooking at home.

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anonymous

all that matters is that a person prefers to go on a date and spend \$120 rather than stay at home and watch the red sox. if this is true, then that means the date is worth the opportunity cost.

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anonymous

The math works much better if you only date married women.

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anonymous

"If you are comparing this to staying home and watching baseball, they your opportunity cost is 0. Or you'd have to state that watching the Red Sox would also cost you \$30/hr. Only if you have the chance to make additional earnings while working in those extra hours do you actually incur opportunity costs. "

No - even if the alternative is stayin home and watching baseball, the oportunity cost is \$30/hr - because, if you, usually, prefer to watch baseball instead of getting a second job or something like that, these mean that the pleasure that you have from watching baseball is higher than \$30/hr.

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anonymous

Can i use this as an excuse for being fast in bed? If i was rational i would have been rich :D

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anonymous

Jonathon is obviously a Yankee fan.

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anonymous

If you are comparing this to staying home and watching baseball, they your opportunity cost is 0. Or you'd have to state that watching the Red Sox would also cost you \$30/hr. Only if you have the chance to make additional earnings while working in those extra hours do you actually incur opportunity costs. So all salaried workers would be exempt from your calculation. Working a second job would most likely be at less than the wage of your primary job.

You are nutting up an excuse not to date.

Hell, determine how many visitors you have on this site during working hours, calculate that by the average wage you say above (less than \$30), determine the overall cost this site has on US productivity, do the economy a favor and Shut. It. Down.

Jonathon Out.

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anonymous

As Anonymous hints, it's even worse than you think. I believe that 1 in 6.06 figure is the number of women who have EVER had sex on a first date, not the number of first dates which lead to sex. However, I would be very happy to be corrected.

(Although, note that if the women who have had sex on a first date are going on more than six times as many dates as other women, the odds for a given date could in theory be BETTER than 1 in 6.06).

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anonymous

Waaaaaaaiiiiit a minute....what was all that one in a MILLION talk!!??

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anonymous

Thanks for the analysis and thought exercise. I think you neglected a couple of key points:
1. In economic theory, the goal of the rational being would be to maximize lifetime earnings potential. Since married men, on average make more, you'd also need to discount the expected increase in pay for getting it right, making the dating more worthwhile.
2. It gets even more complicated when you factor in the cost/benefit analysis for kids (i.e. upfront costs, but may provide a hedge if Social Security goes under and you need someone to change your diapers).
3. Bringing it back to the immediate, there is a value to sex that's difficult to quantify (reduction in stress, increased confidence, etc.) and the additional costs (increase in stress, increased low self esteem).
All in all, I think we can take the analysis in a lot of directions, but I'm not sure the theoretical will actually make much of a difference since I don't know many men nor women who would give up sex in order to spend an additional 4 hours at the office.

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IStan

@below ha! I agree with everything you said - But this is what I meant by steep diminishing returns.

To the final point (and in lieu of better stats) I'll quote one of my favs: "So you're telling me there's a chance!"

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anonymous

Additionally though you may have been going to see that particular movie anyway. Seeing a movie with (even a destable) person sat next to you or not are more or less the same, so you would (in that case) have to subtract both the cost of 1 movie ticket plus the opportunity cost of the hour and a half spent watching the movie. Additionally you have to feed yourself somehow, so we can more or less subtract half the cost of the meal (okay you can do it for cheaper at home but then you're losing opportunity time by cooking, maybe takeaway pizza is cheaper on both counts, but perhaps less healthy as well). Plus you have to take away at least some of the opportunity cost of the meal since as I said you have to eat sometime. Finally even if the date is not successful, you would probably prefer to have dinner with someone (provided they are not completely insane/terrible company) than work. Yeah you might prefer to watch the red sox, but the difference isn't as much as for work. ie (red sox - work) > (red sox - reasonable date).

Finally your calculation for what sex is worth is off, it says that the odds a woman *has had* sex on a first date, NOT the odds a woman will have sex on a first date, or let's call it the odds that a first date will end in sex. These are two quite different values.

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IStan

Anon, thanks. I agree that it is not a perfect measure of opportunity cost. However, I think you're taking the example too literally (of course, no one works 24/hrs a day, so a 9pm movie is not a direct substitution for time spent in the office - though it could be if you're a banker or doc or workaholic...but that isn't really the point). Wage is a convenient proxy for how much we value our time - and is one often used by economists in assigning cost/benefit for non-monetary exchanges (i.e. If some policy measure costs \$X to implement but reduces the time of a target population by Y minutes per person for, say, waiting in line at the DMV - we can calculate a net benefit to society if we can place a value on time). The true value for any individual is likely dynamic, changing in N dimensions with the time of day, day of week, season,..., and even your mood. If we think of your wage as a way of averaging out this dynamism it gives us something tangible to work with. Otherwise, we'd have a much longer article and likely less clarity - this way, we can attack fun questions like this one in a blog post rather than a thesis [IMO these types of questions have really steep diminishing returns, so it wouldn't be worth the time ;)]. I'd love to hear about some other easy ways to approximate the value of time - leave them in the comments if you have any! Thanks for reading.

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anonymous

I don't think your calculation takes into account the marginally decreasing utility of work. Most people go to dates in after work hours, i.e. hours in which they would not work usually. Since most people choose after a regular work schedule to not work, (i.e. they choose even "boring" leisure to work) it is likely that the \$30/hour they would make in fact do not capture the utility of that extra work and are therefore not a good measure of opportunity cost.

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1 in 33.33 adults who is actively dating. You’ve managed to snag a first date with that nice girl in accounting (who may appreciate this analysis, by the way). You’re feeling pretty good, right? Wrong. And here’s why.

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# Ian Stanczyk

Ian joined the Book of Odds team as an intern in the summer of 2007. He began as a researcher and has since moved on to head the Book of Odds marketing team. His research included areas such as sports, employment, demographics, and sleep. Originally hailing from Connecticut, Ian is a Fairfield Prep grad and has since earned a B.S. in economics (magna cum laude) as well as an M.A. in applied economics, both from Northeastern University. When not crafting clever marketing slogans or being hypnotized by site analytics, Ian spends his time reading, attending concerts, playing soccer, and thinking about his next overseas adventure.

Favorite Odds Statement: The odds a woman owns a firearm are 1 in 9.09 (US, 3/2004-6,2004).

Charter member, OSG