Valentines Day is right around the corner.

Love is in the air

A UBCO professor explains why falling in love hurts the wallet more than the heart.

Love—and the ring of cash registers—is in the air.

Assistant professor of economics Ross Hickey, who teaches in the Irving K. Barber School of Arts and Sciences at UBC’s Okanagan campus, explains why falling in love hurts the wallet more than the heart.

According to a survey by RetailMeNot.ca, the average Canadian plans to spend $164 on Valentine’s Day this year.

Traditional romantic gifts still rank high in popularity. On average, consumers will spend $190 on jewellery, $76 on tickets to an event or show, $61 for lingerie, $40 on flowers and $18 for candy or chocolate.

Whether you’re a cynic who thinks Valentine’s Day is just a holiday manufactured by the card, flower and jewellery industries, or whether you go all in with the hearts and chocolate, you might be interested to learn more about the economics of the annual holiday.

Q: What economic factors explain the surge in prices on classic Valentine’s Day items such as flowers, chocolates and cards?

RH: This is the textbook lesson of supply and demand. All it takes is a big increase in demand to create a gap between what sellers can offer and what buyers want.

Valentine’s Day creates a wedge between the amount of flowers demanded by buyers and the amount of flowers supplied by sellers. This excess demand means that the price gets pushed up, and up, and up until demand and supply are once again equal at the new price.

It starts with flowers more so than other goods. Flowers need to be purchased on the day of, or at least within a day or two. Recognizing this, sellers can significantly increase the price because they know that’s when people are going to make the purchase, and it’s expected every February.

Q: Can skipping Valentine’s Day cost more in the long run? Can it lead to breakups?

RH: Studies have shown an increase in break-ups prior to holidays like Christmas, and I imagine the same is taking place around Valentine’s Day, particularly for new couples.

There is gift-giving pressure to make a material investment, and this pressure presents an opportunity to evaluate the relationship through a cost-benefit analysis. Holidays are particularly expensive, and the cost of participating depends on with whom you’re in love, coupled with their expectations, and whether or not you feel comfortable investing in that relationship.

For new couples, the first Valentine’s Day is probably the hardest one. People in new relationships have a tendency to minimize their expectations for fear of being labelled as high maintenance, difficult or needy. As a result, both partners may have the incentive to understate their real expectations, and subsequently find themselves disappointed with their partner. Expectations are something you have to either meet or exceed.

Q: Does social media impact the heightened pressure of Valentine’s Day?

RH: Social media tools without question, make self-comparison more salient. Social media makes a lot of things more visible and in real time. Social media can add pressure to deliver even more on Valentine’s Day than in its absence.

Imagine waking up on the west coast and logging onto Instagram, seeing east coast friends, family, retail companies and celebrities boasting about their Valentine’s Day celebrations. You see it, your partner will likely experience it too, and the effect of this may lead to engaging in more costly displays of affection, than what’s desired.

Many economists actually argue it’s more valuable to receive cash as opposed to material goods or services, because there’s the probability of not purchasing the right gift. If, however, gift exchanges are valued over more than cash by the receiver, your gesture needs to indicate that you know what they like—this is what economists refer to as signalling game, as described by Nobel Prize award-winning economist Michael Spence.

In the absence of these signals, your partner in theory would be happy with just a simple box of chocolates. But because of signalling and yes, social media, we are bombarded with images and experiences that heighten levels of expectations and as a result, can impact what we actually do.

Q: In an effort to spend less and beat the rush, what gifts do you recommend consumers purchase in advance of February 14th?

RH: Chocolates and cards can be purchased in advance, because of their durability. What I would recommend as the better purchase is not necessarily the classic Valentine’s Day merchandise. Instead, you should invest in something that your significant other really enjoys, because those goods or services may not experience a surge in price. Remember, on Valentine’s Day, people are looking for gestures of affection. It’s the time of year when you signal to your partner that you know what his or her preferences are. Most importantly, don’t overthink it. In my experience, matters of the heart are best evaluated without an economists’ lens.

Just Posted

First recreational cannabis store in Okanagan has quiet opening near Lake Country

Indigenous Bloom has opened on Okanagan Indian Band land

New Lake Country school sports fields to include track and field oval

School rec facilities to be developed on former Aspen Grove golf course

Hail the mighty Caesar: Kelowna Caesar creators expand their shop

Simp’s Serious Syrups has opened a store on High Road

Freezing rain, some snow forecasted for Okanagan-Similkameen-Shuswap

Environment Canada forecasting freezing rain and snow for much of the region

Rockets stumble again, lose 6th straight to Moose Jaw Warriors

The Rockets will have to bounce back with weekend games against the top two teams in the league

B.C. opioid crisis to get same world-renowned treatment approach as HIV/AIDS

A program that focuses on treatment as prevention will roll out Jan. 17

Former welfare clients still owed money, B.C. Ombudsperson says

Investigation found 2,600 people docked illegally for earning income

Prince George could get province’s second BC Cannabis Store

The first brick-and-mortar government retail location opened in Kamloops on Oct. 17

B.C. chowdery caught up in ‘rat-in-soup’ scandal to close

Crab Park Chowdery will be shutting down Jan. 20

Teen vaping is an epidemic: US government

E-cigarettes are now the top high-risk substance used by teenagers, outpacing cigarettes, alcohol, marijuana

Vancouver councillors unanimously approve motion declaring climate emergency

Vancouver joins cities like Los Angeles and London

Caribou herd disappears from Kootenays after last cow relocated

One cow from the South Selkirk herd and two from the Purcells were moved this week

‘I never said there was no collusion,’ Trump lawyer says

President Donald Trump’s lawyer Rudy Giuliani says he has ‘never said there was no collusion’

Body of Canadian miner found after African kidnapping

Kirk Woodman’s body was discovered 100 kilometres from the site where he worked for Progress Mineral Mining Company in Burkina Faso

Most Read