The most shrewd innovator of all may be Ikea. The Swedish furniture icon has persuaded generations of consumers to buy products in flatpacks and then devote hours of their own labour putting them together at home. An Ikea guest bed I recently assembled with a family member had an instruction booklet that ran to 28 pages. I calculated the hours of labour we spent in assembly would have added at least $120 to the cost if we had been paid the minimum wage. Self checkouts are just one way we give our time to help companies increase their bottom line. Credit:Bloomberg One of many discoveries of behavioural economics, which analyses how real-life human behaviour affects economic decision-making, is a tendency for consumers to undervalue their own time. Despite all the talk about people being “time-poor” it turns out we are often willing to give time away for free.

Richard Thaler, a pioneering behavioural economist and latest winner of the Nobel prize for economics, emphasised how fallible humans can be when making economic decisions, in his acceptance speech just before Christmas Rather than being the calculating, hyper-rational “homo economicus” of economics text books, humans are absent-minded, procrastinating and notoriously over confident, he said. You can add the tendency to undervalue our own time to the list. A pioneering behavioural economist: Richard Thaler, Nobel prize laureate in 2017. Credit:AP It’s a trait that crops up in all sorts of curious ways. Like a willingness to walk very long distances for cheaper parking or a determination to take a longish drive out of your way to save a few dollars at the petrol pump. My own huge underestimation of how many hours it would take to assemble that Ikea guest bed is a neat example.

The tendency to undervalue our own time creates all sorts of anomalies and inefficiencies in how we organise our economic life. This is likely to become more problematic as fresh business models and methods of exchange are made possible by new digital technologies. That’s because our tendency to undervalue time afflicts workers as well as consumers. Economist Jim Stanford, director of the Australia Institute’s Centre for Future Work, says that when people undervalue their own time it easier for companies (and even governments) to take it for free - whether it’s working unpaid overtime or being stuck on hold. “The way we organise society tends to trick a lot of people into thinking their own time is free,” says Stanford.

“The less we are aware of the value of our own time, the easier it becomes for employers and governments to steal it.” There is a long history of employees and bosses fighting over the use of time at work, of course. Trade unions have sought to limit work hours and standardise employment relationships. Employers have strived for industrial rules that allow the highest output for the lowest labour cost. But Stanford reckons trends in the jobs market today mean the “battle over time” is intensifying and will become a central issue in economic policy and regulation in years to come. A key factor is the rapid growth in short-term, temporary jobs in the so called “gig economy”. Valuing time in the gig economy can be tricky for workers.

While some professions, like legal services, have become very adept at charging “billable hours”, the army of freelancers offering their services in the gig economy are unlikely to be so savvy, especially if they are low-skilled. “People can be tricked into working for way, way below the minimum wage,” says Stanford. He says new “peer-to-peer” digital platforms like Uber or Deliveroo rely heavily on the human tendency to undervalue our own time. “Uber drivers are paid by the ride, so any time that they spend waiting is free, and time they spending driving to pick up the next passenger is also free,” he says. “If Uber was unable to wrest that time for free from its drivers the business model would collapse.”

Uber dirvers give the time they wait for customers to the company for free. Meanwhile, mobile technologies are blurring the boundaries between leisure time, voluntary work and paid work. A fashion vlogger, for instance, can now make videos at home and post them on YouTube in the hope of selling advertisements or being paid to make product endorsements. Or a software developer might give away some software for free in the hope that it will help snare future work as a consultant. Is it worth the time? In many cases that’s likely to be complex calculation. What we do know is that for consumers and workers time is surprisingly easy to squander.