Economics Is a Science of Time Saving: The First Tentative Model

Drew Zhu ()

2014 Papers from Job Market Papers

Abstract: Time might be the scarcest resource for every individual. Time saving should be one of a few specific starting points of Economics. Utility theory is not a perfect theory, which heavily depends on a serial of unrealistic assumptions, and sets Economics on the shifting sands. Time saving could be a solid rock for Economics to build on. In modern society, we typically get more free time by spending some of our whole time to work and earn money. According to a new attribute theory that is different from Lancasterâs attribute theory, the paper constructs the first economic optimization model of time saving that is completely independent of any utility function. This model can also deal with the discrete, including the lexicographic preferences. Due to some data unavailable, the demand function of the time saving good can not be directly derived from the optimization model. Thus an indirect method is used to derive the demand function that has a better predictive power than two common econometric models of that dataset. An interesting hypothesis obtained from the result of the indirect method and need to be verified by more evidence is that we might find a âtime saving lawâ: the income elasticity of demand of time saving goods is approximately 1. Moreover, as a very basic human behavior, time saving can be generalized to other fundamental theories of Economics, especially the long-run growth theory. A further discussion indicates that based on the starting point of time saving, the two paradigms of Neo-classical and New Classical Economics could be united into one paradigm of saving time to increase utility or improving the level of division of labor to save time. Therefore, in the ultimate meaning, it is safe to conclude that Economics is a science of how to save time and time saving might be a milestone that will shift Economics from the pre-Copernican era of Astronomy to a modern era.

JEL-codes: A10 B23 C60 D11 (search for similar items in EconPapers)
Date: 2014-02-21
New Economics Papers: this item is included in nep-hpe and nep-upt
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