Economist Robert Gordon, of Northwestern University, says he drives out of his way to go to a grocery store where prices are cheaper than at the nearby Whole Foods, even though it takes him an extra half hour to save no more than $5.
from this article
Robert Gordon is a good economist. But his actions here are foolish. Clearly he has failed to account for the cost of gasoline and the depreciation of his car, not to mention the value of his time.
Some time ago, I calculated that it costs me about 25 cents to drive a mile. This takes into account the price of gas and my car's gas mileage, but also, more importantly, the expected number of miles my car will last and the total lifetime cost of ownership of that car.
Note that I have a cheap and fuel-efficient car. The average car costs much more per mile. The standard reimbursement rate for miles driven is about 50 cents a mile.
But that may be a bit much, so let's use the 25 cents a mile. This means that, whenever you drive somewhere that is ten miles away, it costs you five dollars. (20 miles divided by 4) The article says it takes him a half hour to go to the other store. This probably means that the other store is about ten miles further. So he has used up just as much money as he has saved.
And of course, the time of a good economist is valuable. He could have been using that 30 minutes to write a book or article. Or he could have used it on leisure. Either way, he is not being smart. And neither are you, if you drive miles out of your way to save a few dollars on something.