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5 months ago

Do DIY projects make economic sense?

Millions of Americans engage in do it yourself (DIY) home improvements. Each summer I choose a project, and about half of the time I actually do it. This year’s project is painting our house’s exterior windows and trim. And yet DIY produces professional angst for me as an economist, because core economic principles imply that I should hire someone for home projects.

About two thirds of American homeowners typically report planning a DIY improvement task. The more than 4,000 Lowe’s and Home Depot stores nationwide largely cater to DIYers. Cable TV channels, magazines, blogs, and YouTube videos assist aspiring DIYers.

DIY, however, ignores the principle of comparative advantage. What does this mean? Suppose that I could have hired a professional for my painting project for $1,000, plus the cost of paint. Paying someone would have taken me less time than doing it myself. This might seem trivial, since I could just watch if I paid someone, but holds even considering raising the money to pay for the job.

Why? I can earn $1,000 working as an economist faster than I can paint. Alternatively, I could earn more than $1,000 in the time I’ll spend painting. I am skilled as an economist (although some of my students might disagree), while painters are better at painting. Comparative advantage shows that we will both be better off by focusing on what we’re good at. Teaching a summer class is a faster way for me to paint my house.

Comparative advantage applies for other projects – decks or landscaping the yard – and other professionals – doctors, plumbers, basically everyone. Much of our modern prosperity is due to specialization based on comparative advantage and buying what we need and want.

Closely related to specialization is another fundamental economic principle, the division of knowledge. A pro knows more about painting than I do; they will have and know how to use all the latest tools. A DIYer is more likely to waste wood building a deck due to mistakes a pro will avoid.

DIY could even make us poorer. If twenty families in Troy decided to build decks themselves this summer, they would likely waste a lot of wood and other materials making the similar mistakes. One specialized company could more quickly and efficiently build all twenty decks.

And yet I am probably painting as you read this. Am I crazy? Perhaps, but let’s not go there. My depiction of comparative advantage, however, does omit several things.

Many people cannot work extra hours (for pay at least) to earn the cash needed to pay for home improvement projects. Opportunities for overtime may not come when you want to do a project. DIY purchases a deck or fire pit we otherwise couldn’t afford using our spare time.

Having workers come into your house is also inconvenient. Hiring a painter or contractor is a hassle. Good contractors are often referred by friends, so you may end up with an unreliable one. (Many free-market economists have contractor horror stories, which should perhaps make us rethink how well markets work.)

Emotional considerations also factor in. DIY was part of life in the Sutter home growing up. We did things like put a new roof on the garage and build a deck, and we helped friends with such projects. I learned DIY before economics, and maybe some lessons are hard to unlearn. Many people enjoy working on their home, which factors into consideration.

Specialization leads to the creation of so much new knowledge that it limits our ability to DIY. YouTube videos level the playing field some, but only help someone who is already handy. The ability to DIY is valuable, even when we choose to pay others to do our tasks. The growing percentage of Americans not confident about changing a flat tire will be dependent on road service.

Good luck with your summer projects DIYers. You probably don’t have to worry while working about failing to apply basic principles you teach students. Perhaps painting my house makes me a bad economist; if so, I’m glad I have tenure!

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University.

24 mins ago

Ivey’s inaugural events to promote children’s literacy

In keeping with the theme “Keep Alabama Growing,” Governor Kay Ivey’s inaugural committee on Friday announced plans to promote children’s literacy throughout the January 2019 inaugural festivities.

“Investing in the next generation is critical to our ability to keep Alabama growing,” Ivey said in a press release. “As we prepare for four more years of growing opportunities for Alabamians, I can’t think of a better place to begin than with our children’s literacy, ensuring they get a strong start.”

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As part of this effort, the governor’s inaugural committee will be hosting book drives at the Gulf Coast Inaugural Celebration on January 12 and the Inaugural Gala in Montgomery on January 14. The books collected will be donated to the Alabama Literacy Alliance, a nonprofit dedicated to improving literacy in communities across the state.

Tickets to the Gulf Coast Inaugural Celebration are available to the general public here. The $25 ticket price will be waived for attendees who bring four children’s books to the celebration.

The Inaugural Gala in Montgomery is invitation only.

More details will be announced in the coming weeks and posted here.

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn

1 hour ago

Ohio-based Gregory Industries set to invest $4.21 million in Decatur steel plant

Ohio-based galvanized steel company Gregory Industries plans to make a $4.21 million capital investment in a Decatur steel plant, according to Decatur Daily.

The investment will consist of the purchasing of 100,000 square feet of the Willo Products building and 13 adjacent acres at the site for a galvanized steel tubing plant.

Gregory Industries recently purchased Mid-Ohio Tubing. Once the Morgan County plant undergoes renovations and begins operations, it will carry the name Mid-Ohio Tubing.

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Company officials hope to have the plant open by June. The plan is to hire 20 employees at an average annual wage of $47,000 and add four more employees by the end of the third year.

According to Mike Rothacher, the Gregory vice president of corporate services, the company will hire a plant manager, maintenance workers, machine operators and general laborers.

The Industrial Development Board of Decatur approved $172,400 in state, city and Morgan County tax abatements for the company.

Morgan County Economic Development Association president and CEO Jeremy Nails connected with Gregory officials after Nucor found out the Ohio company was looking to expand by venturing into the south.

“We rely on existing industries to put us in contact with companies that they deal with,” Nails said. “We don’t have a lot of available buildings so we were fortunate that this building was available. It’s a win-win for Gregory and Willo.”

The Gregory plant will produce galvanized steel tubing that will be used in material called G-street metal framing. The plant will feature a tubing mill and a roll-forming mill.

Kyle Morris also contributes daily to Breitbart News. You can follow him on Twitter @RealKyleMorris.

2 hours ago

Alabama House Speaker McCutcheon hospitalized with heart issue, expects to be released following treatment

Alabama Speaker of the House Mac McCutcheon (R-Monrovia) announced on Friday that he has been hospitalized with a heart issue but expects to be released following treatment over the weekend.

“Deb and I appreciate the prayers of healing that so many have made on my behalf, and I am well on the road to recovery,” McCutcheon said in a press release.

“Tests indicated that I had a blocked blood vessel in my heart, which resulted in the fatigue and shortness of breath that I felt, and the issue will be treated with simple medication,” he explained.

While returning home from the legislative orientation session at the Alabama State House on Thursday, the speaker suffered mild chest pains and shortness of breath and was driven to an emergency room for examination.

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McCutcheon outlined that he first assumed he was suffering from a case of bronchitis, but an EKG indicated a heart issue, which blood tests later confirmed.

His physician recommended a heart catheterization, and those results showed a blood vessel that had closed but did not require a stent and could be treated with medication.

During his recovery, the speaker said he will continue working on House committee assignments and other legislative issues in preparation for the upcoming organizational and regular sessions of the Alabama Legislature. The organizational session begins on January 8.

During the 2014 legislative session, McCutcheon underwent heart bypass surgery and returned to work before the session ended.

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn

3 hours ago

Hoover protest leader recruiting help from Ferguson, Baltimore, Chicago

Carlos Chaverst, Jr., the self-proclaimed leader of protesting in Hoover, is calling for activists to come to Alabama from Ferguson, Baltimore, Chicago and potentially more areas that have been affected by rioting in recent years.

In a Facebook post just after noon on Friday, Chaverst wrote, “Calling ALL activist and organizers from Baltimore, Chicago, Ferguson, Florida, etc. ITS TIME!! We need y’all here in Hoover, NOW!!”

“There will be a organizing [sic]  conference call Sunday night. Details released tomorrow,” he added.

In another post shortly beforehand, Chaverst claimed that protesters would take to Hoover High School after 1:15 p.m. on Friday. 

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Chaverst threatened to go to the school last week but failed to show up. The City of Hoover and the Hoover Police Department have previously said that protesting at city schools will not be tolerated.

Also on Friday, the Nation of Islam’s leader in Birmingham, Tremon Muhammad, wrote, “When the INSANITY comes, you only have yourselves to Blame.”

Muhammad represents Louis Farrakhan in the state. The Nation of Islam is leading the boycott efforts in Hoover, while Chaverst spearheads the protests themselves. Muhammad has explained that he and his members cannot be on the protest frontline because they do “not subscribe to the theory of nonviolence.”

The protest and boycott efforts in Hoover are in response to the officer-involved shooting death of E.J. Bradford on Thanksgiving night at the Riverchase Galleria. 18-year-old Brian Wilson and 12-year-old Molly Davis were also shot during the incident.

Investigations are currently underway by the State Bureau of Investigation (SBI). SBI is a division of the Alabama Law Enforcement Agency (ALEA). Erron Brown has been arrested and charged with attempted murder already for allegedly shooting Wilson.

Attorney General Steve Marshall’s office exercised jurisdiction of all three shooting cases on Thursday.

Sean Ross is a staff writer for Yellowhammer News. You can follow him on Twitter @sean_yhn

A ‘Story Worth Sharing’: Yellowhammer News and Serquest Partner to award monthly grants to Alabama nonprofits

Christmas is the season of giving, helping others and finding magic moments among seemingly ordinary (and occasionally dreary) days. What better way to welcome this season than to share what Alabamians are doing to help others?

Yellowhammer News and Serquest are partnering to bring you, “A Story Worth Sharing,” a monthly award given to an Alabama based nonprofit actively making an impact through their mission. Each month, the winning organization will receive a $1,000 grant from Serquest and promotion across the Yellowhammer Multimedia platforms.

Yellowhammer and Serquest are looking for nonprofits that go above and beyond to change lives and make a difference in their communities.

Already have a nonprofit in mind to nominate? Great!

Get started here with contest guidelines and a link to submit your nomination:

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Nominations open Monday, December 10, and applicants only need to be nominated once. All non-winning nominations will automatically be eligible for selection in subsequent months. Monthly winners will be announced via a feature story that will be shared and promoted on Yellowhammer’s website, email and social media platforms.

Submit your nomination here.

Our organizations look forward to sharing these heartwarming and positive stories with you over the next few months as we highlight the good works of nonprofits throughout our state.

Serquest is an Alabama based software company founded by Hammond Cobb, IV of Montgomery. The organization sees itself as, “Digital road and bridge builders in the nonprofit sector to help people get where they want to go faster, life’s purpose can’t wait.”

Learn more about Serquest here.