When you open your rideshare app and the wait time is long, do you give up? What price do people place on time savings? In two field studies conducted from 2015-2017, Lyft tested out the small trade-offs people make on price and time using data from 13 cities, 13.7 million customers, and 14.8 million ride quotes.
The Value of Time
In Study 1, Lyft assigned riders to a stable condition across 8 weeks: price variations (low, market price, high) crossed with time variations (market or high). Market-market is the baseline experience of Lyft, while people in the price groups saw an average change in price of about 2% up or down, and people in the high time group waited an extra 1.6 minutes on average.
As you might expect, more expensive and slower rides decrease requests. But the richness of the dataset comes into play when comparing trade-offs between money and time. By comparing people’s willingness to request a ride when costs and waits vary, researchers can calculate how much more people would pay to save time. It turns out to be about $19.38/hour.
Of course, other factors influence the value of hourly time. Commuting ($24) and snow ($27) increase the value of short waits, as does using Lyft for a business trip (25% increase).
In Study 2, Lyft replicated their experiment but set condition assignment at the level of a single ride rather than a rider. This design allowed for a little more precision in accounting for context, but results and conclusions were still almost identical to Study 1.
So what? The study’s results suggest that current federal guidelines undervalue time savings and may result in policies that let us waste more time than is necessary: too much sitting in traffic, waits that are too long at the DMV, etc. As behavioral scientists, that wouldn’t surprise us. People are notorious for not using their time well!
Goldszmidt, A., List, J. A., Metcalfe, R. D., Muir, I., & Smith, V. K. (2020). The value of time in the United States: Estimates from nationwide natural field experiments (NBER Working Paper w28208). Cambridge, MA: National Bureau of Economic Research. Retrieved from: https://www.nber.org/system/files/working_papers/w28208/w28208.pdf
Buying Time
What does it really mean for an hour of time to be worth $19.38? No offense to our economist friends, but perhaps a more interesting question is how those expenditures change our experience. As alluded to above, what’s the value in avoiding traffic or in paying for a laundry service? Ashley Whillans and colleagues examined the effect of spending money on time savings and found a reliable positive impact on happiness.
In this research, over 4,000 people were asked to report if and how much they spent on buying more time by hiring out unenjoyable daily tasks. About 28% of people surveyed said they did, usually for things like cooking, shopping, or household maintenance. Among those who didn’t buy free time, happiness was significantly and negatively associated with time stress. Among those who did buy free time, the happiness-time stress relationship was weak and non-significant, and happiness was higher. Importantly, the positive benefits of buying time held across the income spectrum—it wasn’t just rich people.
To confirm these effects, a smaller sample was recruited and given two payments of $40: one to spend on a material purchase, and one to buy time. As in the survey, people were significantly happier when they bought time because they interrupted the happiness-time stress relationship.
However, people do not often spend their money in this way. When asked how they’d spend a $40 windfall, only 20% of people reported that they’d buy time. The research team even surveyed 818 millionaires and found that almost half of them reported no spending on outsourcing disliked tasks! In follow-up work, Whillans finds that people are more likely to buy time if they’re reminded of how busy the future will be, so it may be that this tendency is tied up in optimism.
Whillans, A. V., Dunn, E. W., Smeets, P., Bekkers, R., & Norton, M. I. (2017). Buying time promotes happiness. Proceedings of the National Academy of Sciences, 201706541.
Having Better Conversations
Continuing in the vein of mispredictions, this last article dove into the way we avoid asking indelicate questions of others — and how we might be missing out as a result. The researchers define a sensitive question as “1) about topics that are uncomfortable to discuss, 2) inappropriate for the social context, or 3) about information respondents would rather keep private” and offer up the example of asking a wedding guest if they’ve slept with the groom as an indelicate question trifecta.
The basic study design was always the same: pairs of participants were assigned to have a conversation in which one participant asked questions and the other responded. Sometimes the list of questions was comprised of all sensitive questions, sometimes all non-sensitive questions, and sometimes a mix. After the conversation ended, both Asker and Respondent reported on their experience.
Across 5 studies, the same pattern emerges: Askers worried that sensitive questions would make their Respondent more uncomfortable and that the Respondent would form a bad impression of the Asker, so the Asker avoided sensitive questions. Askers held back even when given a specific goal of learning about their partner or being paid extra to ask those questions. But, regardless of whether they were asked sensitive questions or not, the Respondent reported having a fine time. This pattern held whether the conversations took place between friends or strangers, or online versus face-to-face.
Should you throw your etiquette books out the window and hold an impromptu therapy session on your next work Zoom? 😬 😬 😬 (Maybe not.) But it is worth thinking about whether you’re holding back on asking more meaningful questions and learning valuable information out of miscalibrated assumptions and too much impression management.
Hart, E., VanEpps, E. M., & Schweitzer, M. E. The (better than expected) consequences of asking sensitive questions. Organizational Behavior and Human Decision Processess, 162, 136-154.
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