How many times have you heard that you can save money if you “do it yourself” (DIY)? At diy​nat​ur​al​.com (“Do It Yourself … Naturally”), you can find recipes for homemade versions of fabric refresher, mass-produced snacks, and shampoo. Other DIY websites and cable TV programs show people how to tile their bathrooms, build their own computers, and rewire their homes. And, of course, for generations people have worked on their own cars and done their own landscaping rather than “outsource” the tasks.

Besides saving money, many of these DIYers say they are motivated by the enjoyment they find in such work; it is a consumption good. They like getting under the hood, they like running the power saw. The work needs to be done and they get utility from doing it, so why shouldn’t they do it themselves?

I contend that these arguments are wrong—or, at least, incomplete. I think that many DIY efforts are motivated not by pleasure or frugality, but by wrongful distrust of markets. That doesn’t mean that people are always wrong to attempt home projects—or even cook their own meals or mow their yards—but they should be mindful that the reasons given for such efforts often are problematic. In many cases they’d be better off picking up the Yellow Pages and contracting with an expert rather than buying costly tools and attempting a project that requires considerable skill and experience to master.

Transaction costs / When should you undertake a home project in order to save money? The answer theoretically rests on whether the project is in your comparative advantage. If your comparative advantage lies elsewhere and you operate on the assumption that markets work as vehicles of mutually beneficial exchange instead of tools of exploitation, then in a perfect world you should do it yourself only when those tasks are what you do professionally. Otherwise, you are better off working an extra hour and paying someone else to perform the task you aren’t as adept at. (Of course, we don’t live in this perfect world, and we’ll consider that below.)

Suppose, on the other hand, that you’re a DIYer because you enjoy it. Then why don’t you do such projects full-time, for money? Comparative advantage isn’t defined solely by your ability to create x-number of widgets per hour; it is also determined by how little pay you are willing to accept in exchange for making those widgets. That amount falls if you enjoy performing the task. (Think of Ivy League grads working for peanuts in the offices of Major League Baseball teams). If you actually enjoy an activity that the market remunerates with pay, then why work without pay to produce precisely the amount you want to consume, but without performing those tasks at all for money?

The answers to both of these questions lie in an economic fundamental: transaction costs. In his famed 1937 article, “The Theory of the Firm,” Nobel economics laureate Ronald Coase explained how and why firms choose to hire workers versus outsourcing everything. Transaction costs help explain this. It is difficult and costly to contract out each individual task on a case-by-case basis. Firms will be more profitable if they simply hire workers on long-term contracts to perform the tasks rather than go through this process endlessly.

Similarly, you should do it yourself when the process of hiring someone to perform the task for you is too costly. It is not difficult, generally, to hire someone to mow your lawn on an ongoing basis. In contrast, cutting a shrub after a sudden realization that it has grown too long is assuredly a time to do it yourself.

One could argue that not everyone can afford to hire someone to mow his lawn. However, if we take the idea of comparative advantage seriously enough, does this argument make sense? Suppose my marginal revenue product is $9 an hour. For any other employment, including mowing my lawn, the implicit marginal product of my labor must be less than $9. In a frictionless labor market (a caveat relevant only for the short run), the argument for mowing my own lawn because I cannot afford to hire someone is an argument for working another hour at my job. It is actually prudential to do the thing that seems imprudent to do: “waste” money on outsourcing my yard work.

The argument that “DIY is a consumption good” should also be considered in light of transaction costs. I enjoy cooking, but I do not believe I could find someone who would hire me to cook only when I want to. But it’s certainly imaginable that there are many people out there who would be better off if they took a four-hour shift on Friday nights working at a restaurant. The reason why I cannot easily contract to work for someone is that no one I know would want to hire me to make chicken parmesan for a dozen people on a Friday night.

One other justification for you to do it yourself is that markets may be too thin for you to purchase exactly what you want. The rationale of customization is one of the better arguments for DIY. If a Google search for the precise good you wish to purchase does not yield the correct item, it may indeed be rational to do it yourself.

Negative-sum game? / The reasoning presented above reduces the question about DIY to conventional microeconomic issues. What are the transaction costs? Are there labor market frictions preventing you from finding a job with the exactly optimal number of hours for you to work? Are markets too thin for you to find just what you want? It is easy to criticize neoclassical economics for assuming homo economicus and leaving out the essentials of what it means to be human, but these are pretty basic ideas that should inform what consumers do. Unfortunately, these ideas are generally absent from those DIY websites and TV shows.

The underlying logic of “saving money” is really viewing the market as a negative-sum transaction. In this view, when you buy something from Walmart, you are somehow getting the brunt of the negative sum. This is why “buy it at Walmart” so rarely enters discussions of DIY advocates. The fact that Walmart profits from the transaction becomes ipso facto evidence that you would be better off doing it yourself, even if that means that an anesthesiologist is spending three hours of her labor to “save” $7.

What gives rise to these intuitions is the underlying psychology of folk economics, a concept developed by Emory University economist Paul Rubin in an article of the same name published in the Southern Economic Journal in 2004. Our brain is built to think about economics in certain ways, just as it is built to think about biology or the physical world in certain ways. But these ways are optimized for the period during which the human brain evolved. The world of positive-sum transactions is relatively new. When confronted with a member of another tribe or an entity that is perceived to have only its own interests in mind (like a multinational corporation), the human mind reflexively sees zero-sum as the best outcome for the exchange.

Humanity living under capitalism is the economic equivalent of a world made up of illusions. Our brains struggle to operate in either world. These forces give rise to what George Mason University economist Bryan Caplan calls anti-market bias in his 2007 book, The Myth of the Rational Voter.

Irrationality or preference? / This raises a question: is anti-market bias a cognitive mistake or is it a simple distaste for engaging in market transactions? One may argue that this bias undercuts our ability to figure out how to best choose the most efficient way of achieving what we set out to do. But others may not see it that way. French economist Antoine Beretti and colleagues argue in a 2013 article in Kyklos that monetary exchange comes with repugnancy costs built in, meaning people may dislike the idea of monetary exchange just as they may dislike the idea of eating a cat (though perhaps not as extreme).

The issue of interpretation—are people being irrational or is this simply reflective of preferences?—is very similar to the murky question of sunk costs. (Do we accept illusions because we have a preference for being fooled?) A sufficiently strong statement on the subjectivity of value would require economists to accept the public’s annoyance at ignoring sunk costs as a preference. But since economics textbooks do not take this position, it would be consistent to see repugnancy toward markets as irrationality, not a preference.

Businesses perform cost-benefit analyses to help assess complicated choices when the profit-maximizing path is not immediately obvious. I submit that DIY should be approached the same way, with reasonable figures attached to the value of your time (i.e., your hourly wage rate). Any such analysis would, of course, consider the fact that many DIY activities are in part consumption goods. But the situations where DIY actually makes sense pertain to the economic imperfections of the real world: transaction costs are greater than zero, frictions exist, and there are not an infinite number of sellers and buyers. These are simply not the primary stated reasons of the many advocates of doing it yourself. Hence, in many cases DIY is a mistake, owing to distrust of markets.