THE EQUATION OF THE PRICE OF YOUR LIFE

Q: Have you discovered the formula for the value of time?
A. Not at all. What I’ve done is research, from a microeconomic perspective, on how the economic value of a person’s free time can be measured.

Q. Microeconomic? What does that mean?
In microeconomics, we study the interactions between supply and demand for goods, and how both affect prices and markets.

Q. And what does that have to do with time?
A. Time can be treated as if it were a good or a product. Sometimes we buy time and sometimes we sell it, so it’s a tradable asset. Of course, there are differences.

For example, when you hire a gardener to mow your lawn on Sundays, you’re buying time to spend with your family or friends, and you pay for that purchased time with money. On the other hand, when you go to work, you’re “buying money,” which you pay for with your “time.” The great paradox is that the currency you use to buy money at work is your life’s time—and once it’s gone, you can’t buy more.

Q. Very philosophical…

A. Not as much as you might think—it’s actually more practical. Most goods display diminishing marginal utility, meaning that the more we consume, the less value each unit provides. For example, think about food: if you’re starving, that first bite of a sandwich is wonderful, but not so much if you’ve already eaten three sandwiches and someone forces you to keep eating. This happens only with material goods. When a product includes an experience, its marginal utility can increase instead: the more time passes, the more valuable it becomes. Take a trip, for example. The fact that you may never be able to repeat that same trip—or one like it—adds exponential value to the memory of it. In that equation, the key factor is “time.”

Q. So time is important…

A. Absolutely. The marginal utility of time as a factor is increasing. When you’re young, you don’t value it much because you have so much life ahead of you. Instead, you value money highly because you haven’t yet learned how to generate it. As your life progresses, the economic value of time rises, while the economic value of money falls—this follows the laws of supply and demand. A newborn baby places no value on time because they don’t even understand the concept, so their “time value” is close to zero. On the other hand, a person on their deathbed would give all the money in the world to live just ten minutes more, to give a final hug to a loved one, or to tell their partner how much they love them. The economic value of that extra minute approaches infinity, which in mathematics is expressed like this (∞).

Q. So how do you measure the value of each person’s time?
A. With a formula that considers six dimensions: opportunity cost, health, financial situation, valuation of free time, age, family needs, and their intensity. We combine these six factors with a certain mathematical logic and obtain the price of each hour of our life.

But isn’t the price of each hour of free time just what we gain from living instead of working—in other words, our opportunity cost?

No, that’s not correct. Opportunity cost is what you stop earning by not working.
The Economic Value of Personal Time (EVPT) is the intrinsic value of each hour of a person’s life when not working. To calculate this, we consider the financial situation, personal circumstances, age, health, etc. and the result is often significantly higher than the opportunity cost.

Do you think that once people see a number representing how much each hour of their life is worth in money, they’ll enjoy life more?
I don’t know. What I do know is that for people to truly understand the value of their time, a numerical approach is necessary—and that’s what this formula provides.

Can you give me an example?
If you earn $4,000 net per month and dedicate 200 hours a month to work, your wage is €20/hour. Those €20/hour represent your opportunity cost. Now, if you have no debt and assets worth €100,000, two dependent children, consider your family responsibilities high, value free time much more than work time, and you’re 40 years old, then the economic value of your time is €72.57/hour—about four times your salary. That’s what the formula shows.

And what if the person is older?
Assuming a life expectancy of 85 years, someone who is 70 years old under the same conditions would get an economic value of €282.40/hour for their personal time.

And who would be interested in calculating this?
Everyone. Each person has unique characteristics, so there will never be identical results. And since life evolves—salaries, expenses, investments, children, age, health, job satisfaction, etc.—the variables and results also change over time. We’re constantly bombarded with messages about the importance of living life and being happy. We say we agree, but we don’t act on it because we’re unaware of the “price” of each hour of happiness in our lives.
This is also highly relevant for companies, which can use it to design job offers, roles, remote work options, travel policies, compensation, and more. Companies that help employees understand “how much their life’s time is worth” are showing them that they care not only about the time employees spend producing for the company but also about their life itself. When employees perceive this kind of empathy from their employers, productivity and motivation soar.

And does this method work?
The formula isn’t meant to be the ultimate equation or a reinvention of the wheel, but it has been seriously validated. It will be presented at the International Conference of Economics and Business Management in September 2025 in Bangkok, has already been peer-reviewed, and will soon appear in a scientific journal.

Does the formula help in any other way?
Yes, it helps define the pace at which you should live your life. Someone once said that life is too long to take as a joke, and too short to take too seriously. That’s what knowing how to live is about—and microeconomics can help us understand it.