317 Week 5 Discussion

Nicole: Well, it has to be reliable. I'll be in a mess if it breaks down. I can't afford a lot of repair bills and I don't want a car that's too big. Roger: That's good. Identifying the things you don't want is just as important as the things you do want. Okay Nicole, now that we have your list, the next step is to ask yourself how important are these things?

Nicole: Well, they're all important.

Roger: Sure, but aren't some more important than others? Nicole: Of course, but I'm not really sure which or which? Roger: A good first step is to identify why something is important to you. For example, is getting good gas mileage important to you because it costs more to have a gas guzzler or because having a fuel efficient cars better for the environment. Nicole: It's both and I wouldn't like having to fill up all the time. Roger: Exactly, but we need to be clear about the values involved. The cost of gas is easier to know. The value you place on being green isn't. Have you thought about how much you would be willing to pay to be in green? Nicole: I guess not. Mostly it's just something I want to be, it's a part of who I am. Roger: One way to think about which values are most important is to start with what is least important. You can say to yourself, if I had to give up on one thing, what would it be? Eliminating the things that are less important helps to identify what is most important. Putting your values in this kind of ordered list might help you figure out how important being green really is to you and it might help you take the next step. Getting clear on why you want what you want. Nicole: Alright, but gimme a minute. First I'm supposed to try to put the things I want into some kind of list of priorities. Right? Roger: Right. And then you just make a second column sort of thing where you can start to write down why you want each of the priorities on your list. Nicole: Okay. I think I got it. Thinking about why I valued each thing ahead of time did give me a better sense of how important they really are. For instance, I was way too worried about what people think of me, so what if it takes me two tries to get into the parking space with a bigger car, I'll get better with practice and I also realized that my friends will be happy for me no matter what car I choose. Roger: From your rankings I can see that after affordability you really value gas mileage.

Nicole: I really care about the environment.

Roger: You know, deciding what to do would be so easy if we could always find a way to get everything we want. Nicole: Are you saying that I'm facing a tradeoff between affordability and buying a car that's better for the environment? With better gas mileage won't I get both? Roger: I'm guessing the cost of the car will play an important role, but I'll need some information to prove it. About how many miles a year do you expect to drive? Nicole: I know my mom drives about 12,000 a year, but I think I'll drive about half as much as her. So let's say 6,000 miles. Roger: and what do you think the average price of gasoline will be in the next few years? Nicole: It's about $3.65 here now, but I can see it going up a little. So let's say $4 a gallon. Roger: and how long do you plan to keep the car?

Nicole: I'm hoping until I finish Grad school. So realistically at least five years. Roger: and how much can you afford to spend on a car? Nicole: I've saved $13,000 from summer jobs and an inheritance from my great aunt. I have enough income to pay for insurance and basic maintenance, but after that my budget gets pretty tight. Roger: Good. That really helps. Now for the hard part, let's say you had a choice between two cars which are identical with respect to all your values except affordability and gas mileage.

Nicole: Okay.

Roger: Now imagine you can either spend your entire budget of $13,000 on a car that gets you 30 miles to the gallon or you could spend $10,000 on a car that gets you 20 miles to the gallon. How would you know which one to go with? Nicole: Well, I'd want to work out some numbers first. Roger: I knew you would. So I've already done for you. Here's my calculations. Nicole: Oh, I don't like this already. Based on these estimates, it looks like I could save $1,000 over the five years if I buy car 2, which is worse for the environment due to its worse gas mileage. Roger: This is a perfect example of how trade offs happen. In this case, you'd be spending $200 a year more in order to burn 100 gallons less gasoline. You'd get cleaner air and maybe some other benefits as well as your satisfaction that you're expressing your personal value around helping the environment. But this would be an exchange for your money.

Nicole: Wow. So would cost me $1,000 to be more green. Hmm, It's important to me, but I'm not sure if it's that important. I need to think about this a bit longer. Roger: That's fine. It's just an example, so you don't have to decide what you do, but now you have a way to see the trade off clearly and maybe you can find a way to use that $1,000 to do something even better for the environment. Narrator: Today, Roger Nicole discussed the importance of clear values, the qualities you really want out of a decisions outcome. They introduced the importance of asking, what do I want in and why do I want it to get a better understanding of which values are most important to the decision? Knowing how important each of our values is helps us make tradeoffs using sound reasoning. Remember that values are specific for each decision and unique to each individual. It's okay to ask others for help, but remember that ultimately you are the one that has to make the decision.