Joblessness and satisfaction with different areas of life

So this is it for me. Jobless. Well, for at least two months and a half anyway until I start my lectureship post at York university. And how do I feel?

Well, quite good actually.

But not so much...

Most of the time, I'm just bored. Why? Well, first thing first, there's not much to do while you're in-between jobs. No income too (that's bad and somewhat predictable). But another thing that I didn't quite expect to come following unemployment...

...that is, my social life has gone down the drain a bit.

So, here it is, in details, this is what normally happen to the level of satisfaction with different areas of your life after unemployment.

First, you'd feel broke (even when income is held constant for you) - and this feeling ain't going away in a few years while you're still unemployed. The vertical line here represents the year of becoming unemployed (and you remain unemployed from T to T+5). Note that these are within-person analysis, i.e. I am tracking your satisfaction from Year 1 to Year 6.

Second, and perhaps more surprisingly, you'd in turn become even less satisfied with your social life! One reason for this may be that employment is probably one of the major sources for having a social life. Without it, it's probably harder to stay friends with those who you used to work with (especially if you're female)...

But not all is lost. Apparently you've got a lot of leisure time - more than you can ever hoped for!

But as a whole, things just can't get any worse for you when you're unemployed...

So, I guess, it's a good thing that I'm only unemployed for 2 months then...

Source: British Household Panel Survey

Paper: Powdthavee, N. 2008. Jobless, Friendless, and Broke? A Longitudinal Study of Satisfaction with Different Areas of Life Following Unemployment, mimeo.

A Telemarketer and My Willingness to Pay

I recently received a call from one of the largest telecommunication companies in the U.S. It went like this.

Telemarketer: Hi, this is. . . calling from. . . How are you today?

Me: Good. Thank you.

Telemarketer: Glad to hear that. I have a few questions about your internet service. I am wondering whether you have a cable internet service at home.

Me: Yes, I do.

Telemarketer: Do you get your service from your cable TV company?

Me: Yes.

Telemarketer: Is it. . . or . . .?

I identified the cable TV company I received the cable internet service from.

Telemarketer: They must charge you a lot for your service. Is it $49.99 a month?

Me: No. Not really.

Telemarketer: Oh.. how much are you paying for it then?

Me: Well.. Instead of me telling you how much I'm paying, why don't you tell me what you would offer? What are you offering then?

[Silence. The line is hung up from the other end.]

I was quite stunned. I didn't expect a telemarketer to so easily budge and so quickly hung up on me. A friend of mine and I suspect that the telemarketer might not be accustomed to people being on the offense or aggressively asking questions. I was just too far off her script.

Why didn't I tell her how much I'm paying then? I view this conversation as one in which the phone company would like to know my willingness to pay monthly for internet service. And, if they know my willingness to pay, then they would charge fully up to my willingness to pay and be unwilling to reduce price. They would be able to extract all my joy of paying less than what I am willing to pay. In economics, we term this joy "consumer surplus". Although you don't know what it's called, I'm sure you have experienced it before.

Every girl must remember how good it feels to pay only $19.99 for a blouse which she is willing to pay $39.99. Or, she might find a pair shoes priced at $59.99 and think that the shoes are attractive enough for her to pay $49.99 but not $59.99. One must remember how great it feels to be able to knock $100 off the flight one would have flown anyway. And, remember how victorious it feels to win something on Ebay below the maximum price you are willing to pay?

By the way, I told another friend about this phone call. Knowing that I am an economist in training, he asked what I would have said to the telemarketer, had she not hung up.

My friend: Were you gonna explain to her that you gain more utility staying with the same company?

Me: No. I was gonna explain to her that.. if I give out my willingness to pay, her company will charge me so much that my consumer surplus will be reduced to zero.

My friend: hahahaha.. good for her that she hangs up.

Well.. thank you for read it this far.