People who make somewhat explicit time-money trade-offs often use something like their average wage as a proxy for the “value of time” – the price at which they are indifferent between spending money to save an hour and spending an hour to save money.

This is a reasonable start, but I think it’s mistaken, for at least 2 important reasons:

1. The value of a purchased hour depends on more than just wage level. (Related post.)
   1. In most instances, the more leisure time you have, the less you value an additional hour of it. (“Marginal value of leisure is decreasing.”)
   2. Separate from how much work and leisure time you have when deciding to buy an hour, particular hours have characteristics – energy level, time of day, location, etc. – that affect their value.
2. Valuing time is not a static decision problem. (Related post.)
   1. Factors that affect tomorrow’s value of time (e.g. wages, energy levels) very plausibly depend on today’s decisions about work and leisure. Valuing time without taking this into account might lead to worse decisions. For instance, working more today might lead to counterfactually higher wages or lower energy levels tomorrow, in which case ignoring this fact would lead you to under- or over-invest in work respectively.

(There are also some reasons that I think are not important in practice. For instance, that most people cannot earn an extra one hour of wages by working one hour more, because employment contracts often specify fixed hours.)