Via Daily Finance
by Bruce Watson
As millions of Americans stay home from work today, analysts are already trying to calculate the overall economic cost of a few inches of snow. The trouble is, even the most apparently straightforward calculations use assumptions that can be hard to justify.
The most common method for calculating the economic cost of snow day is to divide the predicted productivity of that day by the number of workers who will be unproductive. However, while this appears pretty simple, there are numerous immeasurable factors that render even the best calculations laughably inaccurate. In the end, the best that one can do is take a good look at the variables involved and sigh meaningfully while imagining the economy taking yet another hit.
In the United States, when analysts talk about the cost of a snow day, the conversation usually starts with the price of snow removal. Unfortunately, even that relatively straightforward calculation is fraught with peril.