What is opportunity cost?

Last updated on Fri, 21st Oct 2022

The term “Opportunity Cost” is something I remember from the Economics class at school.

The definition is somewhere along the lines of the loss of value or benefit of not doing something in order to achieve something else. An example of this in the world of economics is that if I decide to invest money to get a future return, then I miss out on being able to spend the money now. An example from the world of agriculture is that I forego getting a crop this year in order to let a field lie fallow and potentially increase my yield in future years.

The ‘opportunity’ is the future returns on the investment, and the ‘cost’ is not being able to spend now.

The concept is also sometimes summed up by the phrase “long term gain for short term pain”.

It can be applied quite easily to weight loss efforts, and it sometimes helps me maintain focus on what I’m trying to achieve. The opportunity cost that I have is to stop eating unhealthy foods that I might enjoy in the short term, in order to achieve my long-term goal of losing weight.

I won’t see the weight loss straight away, because it takes time to shift those pounds, so I won’t see a real-time correlation between my actions. Avoiding eating a doughnut now won’t instantly make me drop 3 pounds. I will only see those pounds go over the next couple of weeks.

And that’s why it can be so difficult to keep focused on the opportunity cost. Just ask any addict! They know that their addiction is bad for them, but they find it difficult to prioritise their long-term mental or physical health over the short-term hit of their addiction.

Many people (myself included) on a weight loss journey have an addiction – an addiction to food. They often find it difficult to avoid the short-term hit of the giant-sized piece of cheesecake in front over them over the long-term gain of a more healthy body.

So why am I talking about weight loss using an economic theory? Well, everyone has their own way of rationalising things – and this helps me. Your mileage may vary.