<p>Let's say I want to buy a car. It costs that, so I can know that, for example, I have to work 3 months to pay for it. But does the car really needs three months of human work to be build?</p>

<p>What is the real cost of a car in <strong>terms of human work</strong>? More specifically : What is the <strong>marginal cost</strong> of a car in terms of human work?
What does it take build just one more car? And I don't want to include the cost of building the factory, the R&amp;D, or other similar things.</p>

<p>As a first approximation, I could take its cost, and divide by the average hourly wage in the country. <strong>But</strong> this would include profit, taxes and other things unrelated to just building the car. And it would not take into account that the raw materials have been extracted and processed in an other country, with higher or lower hourly wages.</p>

<p><strong>This is how I would try to find out :</strong>
Consider the car factory as a <strong>black box</strong> : we don't care what's going on inside, we just care about input (<em>work, energy, parts, raw materials...</em>) and output (<em>cars, by products, garbage, pollution...</em>).</p>

<p>We divide the input by the number of cars produced, and get a first partial answer :
To build one car we need :</p>

<ul>
<li>X hours of work </li>
<li>Y tons of steel </li>
<li>Z kWh of electricity </li>
<li>...</li>
</ul>

<p>and we repeat these steps, recursively, with the steel factory, the power plant, etc. <strong>until we get to the raw material/mining industry.</strong></p>

<p>We unfold the tree : </p>

<ul>
<li>X hours of work</li>
<li>Y tons of steel

<ul>
<li>N hours of work </li>
<li>M tons of dirt</li>
<li>...</li>
</ul></li>
<li>Z kWh of electricity

<ul>
<li>P hours of work</li>
<li>Q tons of coal</li>
<li>...</li>
</ul></li>
<li>... </li>
</ul>

<p>So in the end, we know there is X + N + P + ... hours of work in that car (and some free natural resources).</p>

<p><em>And what about the same question for a t-shirt? A loaf of bread?</em></p>

<p>I realise it takes <strong>a lot of work</strong> to answer this question. It probably involves analysing a big part of the world economy, maybe the factories are reluctant to give this type of information, and by the time you're done, the processes may have changed so much that you have to start over again.</p>

<p>But still, I think it's an interesting question, and I feel it would help everyone to understand the world.</p>

<p>Has anyone ever attempted this? Is there a book? A database? A Ph.D thesis? A paper?
Or maybe the question should be reformulated?</p>

CC BY-SA 3.0
2016-08-17T06:14:01.567Z
Input-output matrix statistics may be what you are looking for. See the [answer here](http://economics.stackexchange.com/questions/12371/have-social-accounting-matrices-and-input-output-models-fallen-out-of-fashion-i).
Giskard
CC BY-SA 3.0
2016-08-17T06:57:34.260Z
It might be me, but I find your question very confusing. It might be better to edit it to clarify the question, even if we lose your reasoning path. You want to know how much does it costs to produce a car? Like, taking into account the raw material, transformation and assembly costs?
clem steredenn
CC BY-SA 3.0
2016-08-17T07:10:42.067Z
@bilbo_pingouin, yes, I would like to know the cost, but only in terms of hours of human work. It's not clear for you?
Fumidu
CC BY-SA 3.0
2016-08-17T07:24:04.507Z
No, your question isn't clear to me. So you want to know which part of the end cost of the car corresponds to the wages received by the people working on it. Should that also include wages of suppliers?
clem steredenn
CC BY-SA 3.0
2016-08-17T08:05:27.890Z
I want to know the total quantity of human work necessary to produce one more car. I want the money out of the equation, because in the end, human work (and free natural resources) is all we have. And yes, I want to include the work of all the chain of suppliers.
Fumidu
<macroeconomics><microeconomics><cost><productivity><marginal>
Where to start, to know the cost, in hours of work, necessary to produce one more car (or any other good)?
Fumidu
# Where to start, to know the cost, in hours of work, necessary to produce one more car (or any other good)?

(Asked by: username_0 on 2016-08-17)

Let's say I want to buy a car. It costs that, so I can know that, for example, I have to work 3 months to pay for it. But does the car really needs three months of human work to be build?

What is the real cost of a car in **terms of human work**? More specifically : What is the **marginal cost** of a car in terms of human work?
What does it take build just one more car? And I don't want to include the cost of building the factory, the R&D, or other similar things.

As a first approximation, I could take its cost, and divide by the average hourly wage in the country. **But** this would include profit, taxes and other things unrelated to just building the car. And it would not take into account that the raw materials have been extracted and processed in an other country, with higher or lower hourly wages.

**This is how I would try to find out :**
Consider the car factory as a **black box** : we don't care what's going on inside, we just care about input (*work, energy, parts, raw materials...*) and output (*cars, by products, garbage, pollution...*).

We divide the input by the number of cars produced, and get a first partial answer :
To build one car we need :

* X hours of work
* Y tons of steel
* Z kWh of electricity
* ...

and we repeat these steps, recursively, with the steel factory, the power plant, etc. **until we get to the raw material/mining industry.**

We unfold the tree :

* X hours of work
* Y tons of steel
  + N hours of work
  + M tons of dirt
  + ...
* Z kWh of electricity
  + P hours of work
  + Q tons of coal
  + ...
* ...

So in the end, we know there is X + N + P + ... hours of work in that car (and some free natural resources).

*And what about the same question for a t-shirt? A loaf of bread?*

I realise it takes **a lot of work** to answer this question. It probably involves analysing a big part of the world economy, maybe the factories are reluctant to give this type of information, and by the time you're done, the processes may have changed so much that you have to start over again.

But still, I think it's an interesting question, and I feel it would help everyone to understand the world.

Has anyone ever attempted this? Is there a book? A database? A Ph.D thesis? A paper?
Or maybe the question should be reformulated?

**Tags:** macroeconomics, microeconomics, cost, productivity, marginal

> **Comments:**
> **username_1**: Input-output matrix statistics may be what you are looking for. See the [answer here](http://economics.stackexchange.com/questions/12371/have-social-accounting-matrices-and-input-output-models-fallen-out-of-fashion-i).  
> **username_2**: It might be me, but I find your question very confusing. It might be better to edit it to clarify the question, even if we lose your reasoning path. You want to know how much does it costs to produce a car? Like, taking into account the raw material, transformation and assembly costs?  
> **username_0**: @bilbo_pingouin, yes, I would like to know the cost, but only in terms of hours of human work. It's not clear for you?  
> **username_2**: No, your question isn't clear to me. So you want to know which part of the end cost of the car corresponds to the wages received by the people working on it. Should that also include wages of suppliers?  
> **username_0**: I want to know the total quantity of human work necessary to produce one more car. I want the money out of the equation, because in the end, human work (and free natural resources) is all we have. And yes, I want to include the work of all the chain of suppliers.  

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## 0 answers

