Wednesday, June 13, 2012

Why do we shop when we are feeling sad?

Have you ever felt the need to shop because you were feeling sad or stressed? Come on, admit it...

Some philosophers may rush to say that we are living in the age of materialism where there is a lot of unnecessary spending and over consumption. However there is a perfectly simple economic explanation for this phenomenon.

In economics, we have what we call the "utility equation". This equation is comprised of all factors that can affect our mood or enjoyment. Playing basketball for example, puts me in a good mood so I will play basketball in order to raise my enjoyment or UTILITY. Eating a good meal at a restaurant is another factor that raises my utility and hence puts me in an uplifting mood. Utility is measured in utils, an imaginary measurement that exists only to help us organize our preferences.

For me, a scoop of strawberry ice cream offers me 200 utils of enjoyment where a scoop of chocolate only offers me 100 utils. This means that I prefer strawberry ice cream to chocolate. Actually, I like strawberry twice as much as I like chocolate. Now, I know what you are going to ask? What is the scale for these utils? The answer is that there is none. Each person has a scale of his/her own and every time that a decision needs to be made, utils are subconsciously attached to each alternative. The alternative selected, is the one with the higher level of utils. Needless to say that there are alternatives that may offer negative utils and thus a feeling of discomfort. Offer me some grapefruit and I will kindly decline, because I personally attach a negative utility level to the particular fruit.

When we wake up in the morning, we subconsciously have an expected level of utility in mind for the day ahead. When we receive disturbing news, our utility level declines and we are feeling sad and moody. When we are stressed we feel a certain level of discomfort. This is because our utility level has decreased because of the stress. In order to balance our mood and increase our utility, we need to somehow find a way to increase our enjoyment. This is where shopping comes in.

Shopping helps us balance our utility level when we are feeling down. Once our utility level returns to the expected acceptable level, that is where we stop. Given, you might wonder now why is it that women shop more than men.

Even though this theory applies to both men and women, the latter seem to have a higher "marginal utility of shopping". What this means, is that women receive a higher level of enjoyment from buying a commodity (clothes for example) than men. Men attach a higher utility in other activities such as watching a football match. That is why the choice of unwinding methods for men and women are rather different.

Do you feel like shopping today?

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