A few weeks ago we discussed the concept of Utility (benefit), which is the question of how much do you want an item. The overall goal for an individual is to maximize utility with their choices. We looked at this with examples of one good in exchange for another, but I am thinking of utility in a bit larger sense.
My wife and I recently made the decision that I would return to school and complete my Bachelor's Degree. This decision was made by comparing the overall costs to the long term benefits. The initial costs are numerous due to the reduction in my monetary contribution to the household, these can include nights out, new clothes, vacations, new furniture, and many more items which make life more enjoyable. The benefits are not guaranteed though, which makes me question the role of risk in the equation of utility. If I complete my schooling, and am able to secure a position due to my degree then my utility was reasonable. If I am either unable to complete school, or unable to secure a position due to the degree earned then I have sacrificed valuable time and money to go to school unsuccessfully.
In this situation, my utility cannot be determined until many years after the initial decision was made to go down this path. So is utility actually a perceived concept or is it more of potential utility than a guaranteed thing?
Subscribe to:
Post Comments (Atom)
I believe that you should complete your bachelors degree. That's what I'm doing also a know it will pay off in the long run. I could never get my degree and settle as an applebees server for the next 8 years. It is a guarnteed thing that you will have many more opportunities if you have that degree. I think that you two have made the right decision.
ReplyDeleteIn response to your question, which may be rhetorical, I think that utility can be both potential and guaranteed depending on the circumstances. In your example, completing a bachelor's degree is a guaranteed benefit in the sense that you will gain more knowledge to be able to perform adequatly in a higher job position, in my opinion. But the example you gave in your perception of the untility in actually getting a job is more of a potential utility because you are not guaranteed to get a job with a bachelor's degree that will allow you to take vacations, and expand your budget because you will have a higher salary.
ReplyDeleteI see your point. In your case (and all of us in college), our utility may is not 100% guaranteed. Then again, nothing ever is. Risk is involved with almost every business making decision and in life in general. Even though it's not guaranteed, I think it's a very safe bet to say that you'll receive many benefits from getting your degree as long as you stick with it until the end and keep the bigger picture in mind.
ReplyDelete