Those Automated Phone Answering Systems

Offer an interesting example of some changes which may save firms money but which also increase the true opportunity costs for their customers.

Sayz Echidne, after having spent a frustrating afternoon listening to canned messages and pressing digits on the mobile while trying to reach a real person. Because the problem I had did not have an automated answer.

The time I had to spend is a loss to me. I couldn't do other work at the same time, or not as well, and I couldn't do rest or relaxation, either. In economic terms this loss is a real cost. For instance, if it stops a person from carrying out work for pay either the pay for that work is lost or something else will be lost later when the work can be finally carried out. That "something else" is the value of what would otherwise have occurred at that time.

Yet when firms consider changes of these types to the way they operate, the extra customer costs are seldom factored in, until they results in a drop of revenues. Because all firms automated their phone systems at about the same time, customers are stuck with that extra time expenditure.

What's my point here, other than venting about a minor frustration? That when we calculate costs and benefits to various economic agents we should be careful not to ignore costs or benefits which are transferred to someone else, unless, of course, we are the accountants for only one economic agent.

For instance, sending seriously ill patients home from hospitals earlier will save hospitals money. But if those patients then need home-care, someone to stay with them or visiting nurses to see them, the total savings (if they still are savings) will be less than the savings to just the hospitals. This from the point of view of the whole economy, not just the hospitals.