Study puts price tag on time

The formula lets Britons calculate the value of time

Time is money. The question is - exactly how much money?

That was the puzzle economist Professor Ian Walker set out to solve with a new formula to allow Britons to calculate how much an hour of their time is worth - at home as well as work.

It could help people make decisions such as whether to cook a meal or to get a takeaway, or whether to take public transport or a taxi, Prof Walker said.

What this helps us understand is that as the value of our time rises, we are likely to buy more of it

Professor Ian Walker

"This research is the first of its kind to take into account the overall picture of how highly our time is being valued.

"Traditionally, wages or salaries have given an indication of how we are valued at work.

"However, by looking at salaries against taxation, the cost of living and regional variations, we can see how much an hour of our time is worth, whether at work or home."

Economists concluded that someone on a £23,000 salary spends £6 worth of time preparing and eating a simple meal.

Hand washing a car uses up £3 worth of time, while brushing teeth carries a hidden cost of 30 pence.

Rising value

Prof Walker, of the University of Warwick, developed a series of statistical models and calculations over six months to come up with the formula.

The price of the time and food consumed by cooking a dinner was calculated at £10.77 for the average man and £9.81 for a woman.

Ordering a takeaway costs £5.01 for the typical male and £4.96 for a female.

Ordering a takeaway supper is cheaper than cooking

The study, sponsored by Barclaycard, also showed that the value of an hour has climbed over the last 25 years - the national average value for an hour for men is £6.16 while for women it is £4.87.

Prof Walker said: "What this helps us understand is that as the value of our time rises, we are likely to buy more of it, which explains why people are paying to save time, like having someone to cut the lawn or clean the house."