Puzzling preferences
Are our preferences fixed, or can we change them at will?
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Would you prefer a holiday for the advertised price, or the very same one for 25% less? Would you prefer spending half an hour doing the dishes every day, or five minutes loading and (when it’s done) unloading the dishwasher? Such preferences are simple, straightforward and unambiguous: we prefer not to spend more money than necessary on something, and the same applies to spending time.
The efficient allocation of resources like money and time is, perhaps, the most basic concern of economics, and indeed of human decision-making (which illustrates, in case it were necessary, why economics is such a fundamentally human topic of research). All else being equal, we prefer to spend the minimum possible resources in order to achieve a given goal. The reason is as simple as it is overwhelming: it means we have resources left over that we are free to spend on something else. Making the most efficient choice unequivocally leaves us better off. Yay!
A lot of human progress is mediated by this fundamental preference. Our distant ancestors discovered that hunting with weapons was more efficient than hunting with bare hands, and that storing water in earthenware vessels was more efficient than always having to walk to the spring or the river whenever they were thirsty. More recent ancestors came up with the dishwasher. Late to the party (compared to other efficiency-enhancing devices like vacuum cleaners and washing machines), it is still enjoying increasing popularity (ownership in the UK is up from less than one-in-five households in the early 1990s to a whisper below one-in-two in 2018. (Ours broke down earlier this week, and we were promptly reminded of our preference).
Fluctuating preferences
But this is only part of the story about preferences. You like to-may-to, I like to-mah-to (although, other than in the Gershwins’ song, I have never heard anyone express a preference for po-tah-to), you prefer tea, your friend is a coffee lover. This is a trickier aspect for economists, because it is hard to measure this kind of preference objectively, but it doesn’t bother ordinary mortals much. Even if, one day, we prefer a beer with our dinner and the next a glass of wine, this not an issue…
