Inter-American Development Bank
facebook
twitter
youtube
linkedin
instagram
Abierto al públicoBeyond BordersCaribbean Development TrendsCiudades SosteniblesEnergía para el FuturoEnfoque EducaciónFactor TrabajoGente SaludableGestión fiscalGobernarteIdeas MatterIdeas que CuentanIdeaçãoImpactoIndustrias CreativasLa Maleta AbiertaMoviliblogMás Allá de las FronterasNegocios SosteniblesPrimeros PasosPuntos sobre la iSeguridad CiudadanaSostenibilidadVolvamos a la fuente¿Y si hablamos de igualdad?Home
Citizen Security and Justice Creative Industries Development Effectiveness Early Childhood Development Education Energy Envirnment. Climate Change and Safeguards Fiscal policy and management Gender and Diversity Health Labor and pensions Open Knowledge Public management Science, Technology and Innovation  Trade and Regional Integration Urban Development and Housing Water and Sanitation
  • Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Impacto

  • HOME
  • CATEGORIES
    • Beyond development effectiveness
    • Evaluation methods and techniques
    • Measuring our performance
    • What does and doesn’t work in development
  • Authors
  • English
    • Español

Opportunity costs

February 7, 2013 por Francisco Mejía Leave a Comment


costos oportunidad eng

One of the things you first learn in economics is the concept of opportunity cost, and it is probably one of the things you forget fastest. So it is useful to have it explained in layman’s terms:

Applying opportunity-cost theory won’t always change your behavior but can simply be a useful tool to understand why things are the way they are.

When I was pregnant and visiting my OB every few weeks, I waited for the doctor every single time. Sometimes for as long as an hour.  I was furious.

Didn’t they know my time was valuable? But consider this: Because of the way appointments like this work—because they are unpredictable in length—someone will have to wait.

Either the doctor schedules long appointments and sometimes she waits for you, or she schedules short appointments and sometimes you wait for her.

Doctors are very highly paid, and, therefore their opportunity cost is very high. For most of the rest of us, our opportunity cost is lower. If someone has to wait, it’s efficient for it to be the person with the lower opportunity cost. In other words, you.

The only inefficiency here is that you can’t outsource waiting for the doctor. Now there is a missing market.

And please do not confuse it with the concept of sunk cost, which is more related to the time you already wasted waiting for the doctor. So next time you see an opportunity cost, catch it before it goes down in bubbles.


Filed Under: Beyond development effectiveness Tagged With: cost benefit analysis, Opportunity cost, outsourcing, sunk cost

Francisco Mejía

Francisco Mejía is a Consultant at the Office of Strategic Planning and Development Effectiveness at the Inter-American Development Bank.

Reader Interactions

Comments

  1. Andres Valencia says

    February 7, 2013 at 11:53 am

    Great article.

    I will like to complement the article with an emotional dimension “Why waiting in line is torture” http://www.nytimes.com/2012/08/19/opinion/sunday/why-waiting-in-line-is-torture.html?pagewanted=all&_r=0

    Taking the emotional dimension into account the doctor’s office could have pediatrician magazines or educational models for young kids.

    Reply
    • Avatar photoFrancisco Mejía says

      February 7, 2013 at 1:09 pm

      I wish I had seen that before posting. Its a really good read and a different perspective. Thanks

      Reply
  2. Andres Valencia says

    February 7, 2013 at 11:53 am

    Great article.

    I will like to complement the article with an emotional dimension “Why waiting in line is torture” http://www.nytimes.com/2012/08/19/opinion/sunday/why-waiting-in-line-is-torture.html?pagewanted=all&_r=0

    Taking the emotional dimension into account the doctor’s office could have pediatrician magazines or educational models for young kids.

    Reply
    • Avatar photoFrancisco Mejía says

      February 7, 2013 at 1:09 pm

      I wish I had seen that before posting. Its a really good read and a different perspective. Thanks

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Follow Us

Subscribe

Search

About this blog

This blog highlights effective ideas in the fight against poverty and exclusion, and analyzes the impact of development projects in Latin America and the Caribbean.

Categories

Footer

Banco Interamericano de Desarrollo
facebook
twitter
youtube
youtube
youtube

    Blog posts written by Bank employees:

    Copyright © Inter-American Development Bank ("IDB"). This work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives. (CC-IGO 3.0 BY-NC-ND) license and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC- IGO license. Note that link provided above includes additional terms and conditions of the license.


    For blogs written by external parties:

    For questions concerning copyright for authors that are not IADB employees please complete the contact form for this blog.

    The opinions expressed in this blog are those of the authors and do not necessarily reflect the views of the IDB, its Board of Directors, or the countries they represent.

    Attribution: in addition to giving attribution to the respective author and copyright owner, as appropriate, we would appreciate if you could include a link that remits back the IDB Blogs website.



    Privacy Policy

    Derechos de autor © 2025 · Magazine Pro en Genesis Framework · WordPress · Log in

    Banco Interamericano de Desarrollo

    Aviso Legal

    Las opiniones expresadas en estos blogs son las de los autores y no necesariamente reflejan las opiniones del Banco Interamericano de Desarrollo, sus directivas, la Asamblea de Gobernadores o sus países miembros.

    facebook
    twitter
    youtube
    This site uses cookies to optimize functionality and give you the best possible experience. If you continue to navigate this website beyond this page, cookies will be placed on your browser.
    To learn more about cookies, click here
    X
    Manage consent

    Privacy Overview

    This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
    Necessary
    Always Enabled
    Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
    Non-necessary
    Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
    SAVE & ACCEPT