Thursday, July 24, 2008

Buy, Rent or Borrow

In a recent piece in The Wall Street Journal, (link no longer available) columnist Neal Templin discussed his aversion to buying books. He's an avid library user, although he admits that he owns books that he reads over and over again - Tolstoy and Willa Cather. He also admits to buying paperbacks and leaving them someplace when he's done so they can be enjoyed by others.

This got me thinking about the concept of utility or value. Jeremy Bentham wrote about the idea of utility early in the 19th century. And while the subject is rarely discussed at the high school level, I've found it an interesting way to explain the power of price in the market.

My instructors mentioned three types of utility - form utility, place utility and time utility. Form utility meant that the good or service possessed a form that the consumer valued. Place utility meant the good or service was available at a location the consumer valued. And time utility meant the good or service was available when the consumer valued it. These explanations helped students understand that a good or service had different utility to different people at different times. Thus it was possible that something that was worth $5 to a consumer on one day may or may not have the save value the next day. And even if the product was worth the same amount from day to day, it may be for different aspects of utility.

This brings us back to the piece in the WSJ. We may surmise from Templin's piece that he sees little value (utility) in the ownership of most books. Form utility clearly is not a factor because he still is an avid user of books (no mentions of electronic formats were made). One might then think that, with occasional exceptions, Templin places little place or time utility on most books. That is, unless he sees himself going back and rereading a particular book, there is no advantage or value to him in having it at hand all the time, i.e. owning the book.

I admit I am the opposite. I own most of the books I've purchased or inherited over the years, including a few textbooks. For the most part, I see value in having the books at hand to reference whenever I wish. I freely admit I don't refer to them on a daily basis, but I do it. And there is a level of satisfaction (utility) in finding something on the shelf that I had all but forgotten. An example of that is the recent broadcast of the updated movie The Andromeda Strain on A&E. I enjoyed the original version of the film released in the early 1970s. The new version had superior special effects (as one would hope), as well as some unneeded political sub-texts. But I only vaguely remembered reading the book by Michael Crichton. I went back to the bookshelf and found an old paperback copy, which I will now reread with added interest and insight. And I have been encouraging my 18-year old to watch the movies and read the book.

My suggested application of the concept to engage your students in a discussion of what value (if any) they place on ownership an which items have that value for them? I know in the case of my sons, things like music, video-games, and even books have low utility in ownership - with some exceptions. And granted, the internet can make many things available when/where we want - reducing the time/place utility of ownership. But to me, some things still need a certain form - books are among those things.

I look forward to your comments.

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