Every year on 14 February people celebrate this day by sending messages of love and affection to partners, family and friends. Couples send Valentine’s Day cards and flowers and spend special time together to honour their love for each other. This day creates a platform of business i.e. economics.
The economic impacts of Valentine’s Day and its on-going commodification are very predictable – restaurants, jewellery, flowers, lingerie, alcohol, and cards. Valentine’s Day creates and supports some local jobs in restaurants and retail and also employment. All this expenditure produces economic benefits for someone. Valentine’s Day cards and gifts (especially flowers and chocolates) are a multibillion-dollar industry that props up whole economies
Economics can also tell us how to make Valentine’s Day special for our significant others. First, figure out how to signal to your mate that you really care about him or her. Second, if you want to give your mate a great Valentine’s present, spend money on yourself. Finally, one great gift is to stop hoping for perfection in your mate
Like food and locomotion, Love is a human need. Like most other products and services, it is a scarce resource. Like all economic goods, it helps man in his quest for happiness. Since economics focuses on allocation of scarce resources and the cost-benefits thereof, surely there is a strong foundation for an economic theory of love. The economics of it need not be confined to commerce, jobs and profits. Self-styled “romantic economist” William Nicholson explains that there’s much in economic principles that can be applied to one’s romantic relationships as well. The phenomenon of Valentine’s Day prices of red roses is one of the best illustrations of the Law of Supply and Demand: If nothing else changes, higher demand will raise the price of a good, while higher supply will lower it, and vice versa.
Valentine’s Day contributed about $19.6 billion in 2018 to the economy, according to the National Retail Federation. That’s more than the $18.2 billion spent in 2017 but slightly lower than the record $19.7 billion spent in 2016. An industry body has valued the Valentine’s Day (V-Day) market in India at USD 27 million (Rs.15 billion) based on a survey involving 800 executives in major metros and 1,000 students from 150 educational institutions. The Associated Chambers of Commerce and Industry of India (Assocham) said the size of the market was this large since V-Day was not a single-day fete but was celebrated throughout the week. It starts with Rose Day (Feb 7), followed by Proposal Day, Chocolate Day, Teddy Day, Promise Day, Kiss Day, Hug Day and Valentine’s Day (Feb 14)
The four distinct economic pay-offs which love gives us are emotional, material, hedonistic and spiritual. There are six costs of love. First, the cost of search—as singles aim to find their “true love”. The cost of search is the cost of time and energy spent in networking, visiting singles bars and information seeking, among other practices. Second, there is the cost of dating and courtship. This is once again a time-cost, and the recurring cost of restaurants and movies. It also includes the cost of possible distractions from career or studies (we will ignore the collateral cost of being pounced on by lumpen elements such as the Sri Ram Sene). Third, there is the cost of rejection, which includes the high emotional cost of being dumped. Fourth, we have to consider the cost of maintenance once the love affair has taken a more serious tone. Again, there is significant time-cost but also the cost of gifting and the cost of emotional commitment and peace of mind. Fifth, we must consider the cost of long-term partnership, which is often the natural culmination of love. Here, apart from explicit costs, there is the opportunity cost of giving up one’s freedom in pursuing another potentially exciting partner, as well as the opportunity cost of career and life adjustments. The sixth, and final, cost of love is the cost of a potential incompatibility and break-up, including the inevitable mess that accompanies such separation.
Mithilesh Kumar Sinha
