Time Prices and Measuring Abundance in Hours of Work

A time price is the cost of a good or service measured in hours and minutes of work instead of dollars. If a worker earns 25 dollars an hour and a bag of rice costs 5 dollars, the time price of that bag is 12 minutes. Time prices give learners, teachers, researchers, and AI agents a simple and testable way to ask whether something is actually becoming more abundant for ordinary people, or only appears more or less costly because of inflation and changing currencies.

Why measure in time instead of money

Money prices are hard to compare across decades. A dollar in 1950 and a dollar today are different units. Inflation adjustments help, but they depend on price indexes that bundle many goods together and change their methods over time. Time is a steadier unit. An hour of life in 1900 and an hour of life today are the same length. Asking "how long would I have to work to buy this?" gets closer to what people experience.

Economist William Nordhaus made this point in a well known study of the history of lighting. He traced the labor cost of producing light from fires and candles to oil lamps, gas, and electric bulbs. He found that the true cost of light had fallen by several orders of magnitude, and that standard price indexes had badly understated the improvement. The lesson for researchers is that ordinary statistics can miss how fast some goods become abundant, especially when the quality of the good changes.

Economist Julian Simon argued that human ingenuity tends to make resources more abundant over time, measured by how much work it takes to obtain them. His famous bet with biologist Paul Ehrlich on the prices of five metals is still used as a teaching case.

How to calculate a time price

The basic formula is short.

Time price = money price divided by hourly earnings

Hourly earnings can be measured in more than one way, and the choice matters.

Average hourly wage
Median hourly wage
Minimum wage

Wage for a specific job or region
Earnings after taxes
Total compensation including benefits

Example only, using made up numbers for teaching: if a laptop costs 600 dollars and a worker earns 20 dollars an hour, the time price is 30 hours. If ten years later a better laptop costs 700 dollars and the same kind of worker earns 35 dollars an hour, the time price is 20 hours. The money price went up, but the time price fell by one third, and the product improved.

What time prices reveal

Time prices help separate three different claims that often get mixed together in public debate.

Something fell in price in money terms.
Something now requires less work to obtain.
Something requires less work to obtain and is also better in quality.

The third case is where abundance is most visible. Computing, data storage, lighting, long distance communication, and many manufactured goods fit this pattern. Solar panels and batteries are commonly studied with learning curves, which describe how costs fall as total production grows. Learning curves and time prices together make a useful research toolkit for studying where abundance is happening and why.

What time prices miss

A good learner should also study the limits of any measure.

Uneven goods. Housing near jobs, child care, college tuition, and health care often get more expensive in time terms while electronics become more affordable. The economist William Baumol described why labor heavy services tend to rise in cost relative to manufactured goods, a pattern covered in more depth at Why housing and care prices rise while goods prices fall. An average across all goods can hide the specific scarcity that hurts people most.
Who earns the wage. A falling time price based on average wages may not hold for people with low wages, unstable hours, or no job.
Access and rules. A good can have a low production cost and still hard to get because of zoning, licensing, patents, or distance.
Unpaid time. Commuting, paperwork, and waiting in lines also cost hours, and these rarely show up in price data.

This is where time prices connect to Problems in living. Many everyday problems in living are really about a few goods that stay scarce in time terms while much else becomes more affordable.

Why this is useful for AI agents

Time prices are easy for software agents to compute and explain, because they only need a price, a wage, and a date. An agent helping a person or a researcher can convert a price into hours, compare it across years, and flag which part of a budget is getting more scarce instead of less. Agents should always state which wage measure they used and cite the source of both numbers, because the result can change a great deal depending on that choice.

Discussion questions, essay ideas, and learning related AI prompt ideas

Is time a fairer unit than money for comparing living standards across centuries? Why or why not?
Which goods in your own life have the highest time price, and are they becoming more or less affordable?
Why do electronics tend to fall in time price while housing and care often do not?
What would a post-scarcity economy look like if it were measured in time prices?
Should policy goals be written in time prices instead of money prices?
AI prompt idea: Using official wage and price data that you cite, calculate the time price of a gallon of milk in two different decades and explain the result.
AI prompt idea: Explain the difference between a money price, an inflation adjusted price, and a time price to a high school class, with one worked example labeled as example data.
AI prompt idea: List five goods that have become far more abundant in time terms and five that have become more scarce, and suggest a research question for each.

Readings from Wikipedia

External links

References

Nordhaus, William D. "Do Real-Output and Real-Wage Measures Capture Reality? The History of Lighting Suggests Not." In The Economics of New Goods, edited by Timothy F. Bresnahan and Robert J. Gordon. University of Chicago Press for the National Bureau of Economic Research, 1997.
Simon, Julian L. The Ultimate Resource 2. Princeton University Press, 1996.
Baumol, William J. The Cost Disease. Yale University Press, 2012.

Last checked: October 2026

Time prices and measuring abundance