What to Charge?

I had a dental appointment today, in which I expected a filling and ended up with a root canal. If you have kids with overlapping teeth, do them a favor and give them braces! But, I digress. We have a new dentist, and of course, I brought along a knitting project for the waiting time. He was interested in what I was making, and I told him about my Etsy store. Watching me knit with 4 needles in the round, he said, "I can't imagine doing that. It surely can't pay very well, does it?" I told him that my best-selling item, cupcake hats, take me about 4 hours to make, and I charge $18 for a hat. So, no, the hourly wage stinks. But, I reasoned, it is something I can do in my "spare" time, and pays better than washing the dishes.

So, now I wonder. Several things. Am I devaluing my time? Is my time really worth even minimum wage? Say I charge $7/hour. I would have to charge $28 for one of my cupcake hats. I'd love to get that much, but will they really sell for that much? I know there are some people who really appreciate the work that goes into hand knitted items, but I have to assume most people don't, and if they can get something equally cute at Wal-Mart for $8, why would they pay $28 for my hat? These are questions I've asked myself numerous times. I don't really know the answers. I personally would probably not pay $28 for a hat for my child (of course, I can make one myself, so why would I?). I've always been frugal and love a bargain. And yet, as a craftsperson, isn't my time worth at least minimum wage?

Aside from that constant, personal little debate, I've been knitting lots of fun things for little ones. I've designed a lacy hat and made some cute bows to wear with it. When my girls were little, they had very little hair, so it was hard to get any bows to stay in their hair. I wish I'd had one of these little hats so they could wear the bows on the hat! So far, I haven't sold any, but I hope that's because it has been summer here in the Western hemisphere. I'll attach some pictures of the hats. I've also been knitting some cute leg warmers, but I don't have pictures of those yet.