THE STANDARD OF LIVING

AND THE HASSLE FACTOR

More than income alone must be considered when determining a

standard ofliving. The Hassle Factor also takes into account many
other aspects ofyour lifestyle to ascertain how comfortably you live.
RICHARD N. FARMER

For many years, economists have closely

examined gross national product per capita as
a measure of living standards. A high income
is fine, and most people prefer more to less,
but in recent years, critics have noted that

income isn't everything. A living standard also

depends on such factors as good health,
quality schools, freedom from pollution, and
other amenities. Efforts have been made to

evaluate these things in a general, macro-social

manner: it does little good to have money if
you can't gain access to good health care or if
your children cannot go to good schools, and
so on.

Considerations of this sort lead me to

propose the Hassle Factor as a micro-social

measure for standards of living. Leave the

income questions for the moment to econoRIC1IARD N. FARMER is professor of international

business administration at the Indiana University

School of Business.

mists, and consider the plight of a typical

middle-class American family. This family will
have an annual income of over $18,000 per
year, very high by global standards. But what
does this mean in terms of day-to-day living?
Is a family with this income actually living
well? It all depends on how much hassling
occurs in their day-to-day life. If every day is
a dawn-to-dusk struggle with the world, then
their standard of livingis not nearly as high as
another family's whose daily existence is
smooth and serene.

What bothers you may be irrelevant to

me. Some people don't mind waiting in lines;

others hate it. Some people want and appre

ciate fine parks; others prefer good libraries.
So an accurate hassle index must necessarily
take into account many possible hassles. The
index should also provide proper wcightiug of
each factor, depending on what each indi
vidual finds important.
A proposed hassle index follows, which

DECEMBER 1980

Copyright 2001 All Rights Reserved

RICHARD N. FARMER

you can use to measure your own standard of

a place where no one can remember where

living assuming that you have somehow solved

the problem of earning enough money to

they put the front door key because they

haven't locked the door in four years. If you
need triple bolt locks and a vicious police dog
to guard your property, you are seriously

enjoy the rest of life. Each factor can be rated

from 0 to 10, with 10 as "excellent" and 0

"terrible." In this complex, diverse country,

values may even change from block to block
in the same town or city, so this index should
work specifically for you. Moreover, you can
weight each hassle factor from 0 to 10 in

terms of how important it is to you person

ally, with 0 for "irrelevant" and 10 "very
important." For example, a family with small
children may worry a great deal about good
schools and weight this factor a 10, while the
family next door with no children would give
this factor a zero. It depends on who you are
and where you are in your life cycle.

hassled. Score your situation from 0 to 10.

Misguided Medics: You have a distress

ing toothache, but the earliest a local dentist

can

see you is four months

from next

Tuesday. Or you need a simple shot, and you

wait six hours in the doctor's office to get it.
But diere arc places in these United States

where genial health care practitioners not

only see you quickly, but also pay attention
to you as a person. If you are fortunate

enough to live in such a place, give your

hard-working medics a 10. If not, well, join
everyone else.

Continuous Commuting: If
drive two hours each way to
fighting traffic all the way, you
When your local bus line is on

SOURCES OF HASSLES

Here are the major hassle factors:

Bumbling Bureaucrats: There is little

joy in standing in line at some state agency

for six hours, only to learn when you finally
reach some surly clerk that you should have
been somewhere else. Spending three days
trying to get a passport, building permit, or
whatever else you might need from local,
state, or federal bureaucracies is irritating. If
your local bureaucracies are terrible, give
them a 0 or 1. If, on the other hand, most of

them are efficient and polite, give them a 10.

Such bureaucracies do existsomewhere.

Manana Marketing: This factor could be

called the "Next Tuesday Syndrome" in its
extreme form. You want something you need,

and it will always be in next Tuesdayexcept

it never is. You also find your favorite bread

is always out of stock, and the auto agency

never has the parts your car constantly needs.
You have moneybut can't spend it. Give
your local stores a 10 if they serve you well,
and much lower if they don't.
Scary Security: If you're likely to get
mugged every evening when you go out for a
stroll, your neighborhood is not as pleasant as

you have to
work daily
are hassled.
strike every
other week, you are impoverished. If traffic
congestion is so bad you have to carefully
calculate when you can leave the house, then
you are not as well off as the person who goes
where he wants, when he wants, with no
trouble at all.

Redoubtable Repairmen: We all need an

expert occasionally, and affluent people need

them often. After all, affluent people have

more things to be repaired. But if your
furnace fails in mid-January on the coldest
day of the year, and your friendly repairman
shows up in July to fix it, your living standard
is not as high as you thought. When you have
to take your car to the shop six times to get
something fixed, waiting three or four hours
each time, your lifestyle is threatened. Believe
it or not, there are places in our land

where repairmen show up when called, really

fix what's broken, and even send reasonable

bills. If your location is not like this, then give

the various repairmen a low score on the 0 to
10 index.

Noxious Neighbors: You may have a

lovely apartment, but those characters up

stairs happen to be tuba players who like to

BUSINESS HORIZONS

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The Standard of Living and the Hassle Factor

"Someone once said, 'Money isn't everything, but it sure as hell beats
whatever comes in second.' Money really isn't everythingwe dislike
being hassled in critical ways."
practice at 3 a.m. That kid down the block is
an apprentice pyromaniac, and three houses
around you have gone up in smoke. And the
polite fellow down the hall deals in drugs.

Such goings-on are not conducive to a happy

neighborhood life.
But there are likable neighbors every
where. You may be lucky enough to be
surrounded by them. If you are, give them a
10.

Unctuous Utilities: We all need gas,

electric power, telephones, good garbage ser
vice, and sewers that work. Having the money
and discovering that you must wait six
months to have a telephone installed is not
enjoyable. If the electric power goes off for
three days every time it rains, your standard
of living is reduced. And if the sewers (built in
1872) back up every so often because the
beleaguered city government can't afford to
replace those relics, then you are experiencing
hassles. Score them all together.
Penetrating Pollution: You finally
bought your dream cottage, only to find out
that a city upstream has trouble with its
effluent, and your babbling brook smells like
art open cesspool. You may live in a city with
air pollution so bad that on muggy hot days,
you are advised to stay inside. This can
interfere with your lifestyle, so if similar
annoyances happen to you, mark a low score
down on the index.

Rewarding Recreation: If you love

opera, and the nearest opera house is only six
blocks away, you're living well. If your chief
interest is college basketball, and an exciting
team is nearby so you can see the games,
you're in clover. People prefer many different
types of recreation, so if whatever you like to
do is nearby, accessible, and relatively low
cost, score this factor high.

Enveloping Education: Parents want

their children to be well-educated, but they

also like to get education themselves. If you

enjoy reading and an excellent library is
nearby, score this factor high. If your children
can go to good schools, the same applies. If
you enjoy taking economics classes or hearing
outstanding lectures by noted academicians,
then the presence of a fine university or
college nearby is a big advantage. Score this
one according to your own interests.
Comfortable Climate: Some

people
enjoy skiing and snowmobiling, so icy winters
are best. Others would prefer warm beaches in
subtropical climates. Wherever you live, hav
ing the wrong weather can be a severe hassle.
But as usual, your tastes and rating can be
different from those of others.
Note that each of these hassle factors has

a weight depending on how important the

given factor is to you. To demonstrate the use
of the hassle index, I have in the accompany
ing figure scored my own preferences and
rated my own medium-sized, midwestern
university town and San Francisco. Note that
certain critical hassles just do not concern me,
but those factors may matter to you. The
higher the score, the less hassle it is to live
there.

This hassle factor, combined with your

income, indicates your actual standard of

living. We all know people with lots of money
who really don't live that well. They are too
hassled by their surroundings to lead an
enjoyable life.

CALCULATING YOUR HASSLE FACTOR

Each person's maximum score will be differ

ent, given the weight assigned to various

DECEMBER 1980

Copyright 2001 All Rights Reserved

RICHARD N. FARMER

Computing

the Hassle Index

To tal Score

(Personal Factor Rate X

Factor Score)
Bloomington San Francisco

Personal

Factor

Bureaucracies

Marketing

Factor

Factor Score

Weight

Bloomington San Francisco

10

70

60

10

35

50

Comments
You can get anything
in Frisco

Security

We lost the house key long

ago in Bloomington. Triple

10

10

100

30

Medics

24

24

Commuting
Repairmen
Neighbors

10

90

24

81

18

10

10

100

30

Bloomington is great!

Utilities

10

90

90

Thanks to Ma Bell, PSI,

10

60

48

deal-bolt locks in Frisco.

Not much family illness

hence low weight
Walk to work in Bloomington

etc.good work!
Pollution
Recreation

10

30

24

Education

10

10

100

60

Climate

10

10

20

Who has time?

Oh, well .. .

100

"56T

800

Total possible, given my personal factor rates: 950

total score

Rlnnmincrtv*

highest possible score

Moral:

'

Rd.9

950

San Francisco

560

Move to sunny Bloomington , if you have an income and like what I like!

hassles. However, we can easily compare

hassle indexes, by figuring the ratio of your
total score divided by the total maximum
score. This is the Hassle Factor. For this

author, Bloomington's HF is .842 (the

Bloomington score of 800 divided by the
maximum possible score of 950). For San
Francisco, it is .591which may explain why
I live where I do. Any place that is 84 percent
hassle free is fairly pleasant. You can figure
out your own HF for wherever you are and
see if your living standard is better or worse
than someone else's, since the HF is a
comparative number.
Like any other index, this Hassle Factor

has many uses. If you are offered a job in

some distant place, it would be useful to
calculate the Hassle Factor you now have and
compare it to the new Hassle Factor you
might face in the new locale. Real estate
brokers might find this hassle index a useful
tool for matching potential customers to

various properties. Note that this could lead

to careful tailoring of properties to families,
since the weight of each hassle factor is
different for each person. An aggressive
broker who sells a house in a neighborhood
with terrible schools to a family with five
young children might live to regret it, but the
same property sold to a childless couple or a
pair of empty nesters might lead to happiness,
less hassle, and further business. Good real

estate salesmen already do such calculations

intuitively, but the HF is a way to make the
whole process very scientific.
Someone once said, "Money isn't every
thing, but it sure as hell beats whatever comes
in second." Money really isn't everythingwe
dislike being hassled in critical ways. This
Hassle Factor could enable you to avoid
environments which are inhospitable, and find
those places which, while not Utopias, are at
least better for you than many others.

BUSINESS HORIZONS

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Gas Mileage and Car Shopping - Quick Reference Tables

Table 1: Gas Savings from Equal Improvements in MPG
100 Miles Driven

Gallons Consumed per

10,000 Miles Driven

10

10.00

1,000

15

6.67

667

Miles Per Gallon

Gallons Consumed per

20

5.00

500

25

4.00

400

30

3.33

333

35

2.86

286

40

2.50

250

45

2.22

222

50

2.00

200

Table 2: MPG Improvements that Save Equal Amounts of Gas

Miles Per Gallon

Gallons Consumed per

Gallons Consumed per

100 Miles Driven

10,000 Miles Driven

1,000

10.0

10.00

11.0

9.00

900

12.5

8.00

800

14.0

7.00

700
600

16.5

6.00

20.0

5.00

500

25.0

4.00

400

33.0

3.00

300

50.0

2.00

200

Table 2 shows that the changes 10 to 11, 16.5 to 20, and 33 to 50 save the same
amount of gas for a given distance driven (one gallon of gas per 100 miles or 100
gallons of gas per 10,000 miles).
For more information about "The MPG Illusion" and other research from Duke

University's Fuqua School of Business, please visit www.fuaua.duke.edu or contact

Laura Brinn at laura.brinn@duke.edu.