The Fiscal Factor

We’ve all done it. You sit down to study for an important test or start a project, and suddenly your brain decides it’s the perfect time to clean your room, scroll through Instagram, or watch just one more episode of a show you’ve already seen twice. Procrastination feels harmless in the moment, but from an economics perspective, it’s actually a pretty inefficient use of one of our most valuable resources: time. 

In economics, scarcity is everything. Time is one of the scarcest resources we have unlike money, we can’t earn more of it or save it for later. Once it’s gone, it’s gone. So when we procrastinate, we’re making a decision that carries a cost, even if it doesn’t feel like it right away. That cost is known as the opportunity cost, the value of what we could have done instead. Time is money.

Let’s say I spend two hours scrolling through Instagram instead of working on my math homework. The opportunity cost isn’t just the unfinished homework, it’s also the good grade I might have earned, the stress I’ll feel later, and even the sleep I’ll miss when I stay up trying to finish everything last minute. When we procrastinate, we’re often choosing short-term comfort at the expense of long-term gain.

But why do we keep doing it, even when we know better? That’s where behavioural economics comes in. Unlike traditional economics, which assumes people always make rational choices, behavioural economics explores how we actually behave, which, honestly, is often irrational. 

One key idea is present bias, which means we tend to focus on immediate rewards over future benefits. Watching a funny video now feels better than imagining a high test score a week from now. There’s also something called hyperbolic discounting, where we undervalue future outcomes just because they’re not happening right away. So, even if we know we’ll regret putting things off, our brains aren’t wired to care enough in the present moment. 

Another interesting concept is the sunk cost fallacy. Sometimes, if we’ve already wasted time, we tell ourselves, “I’ve already lost an hour, so what’s one more?” This is flawed thinking. In economics, sunk costs should be ignored when making current decisions, but in real life, we often let past losses affect present choices.

In a way, procrastination is like a small scale version of market failure. Just as resources in an economy can be misallocated, our own time and energy get used inefficiently. We don’t always make choices that maximise our long term utility, especially when there’s no immediate consequence. 

How do we fix it? Incentives help. Just like in economics, if the right reward or consequence is in place, behaviour changes. 

Procrastination is basically me choosing to sip my iced matcha and scroll on Instagram instead of doing literally anything productive. It’s like spending all my time on things that feel good now and later, I’ll have a stress meltdown, dramatically stare at the ceiling, and complain like it’s the end of the world.

Remember, because if time really is money, procrastination is a pretty expensive habit.