Janie Xue
As with every major holiday, Valentine’s Day is characterized by a boom in consumer spending. Couples are splurging on fancy dinners, chocolate sets, and flower bouquets; single individuals buy gifts for family, friends, or themselves. Everyone is buying something -- and this dramatic increase in spending results in significant economical impact.
Valentine’s Day spending has been on the rise. The National Retail Federation estimated that Americans were to spend $19.6 billion on Valentine’s Day in 2018, with the average consumer paying about $145. The increase the spending could be partially attributed to the wealth effect. Price levels of popular Valentine’s Day goods -- candy, flowers, greeting cards -- have remained relatively stable, allowing consumers to have more purchasing power. The increase in purchasing power in turn causes consumers to spend more. Additionally, America has been in the expansion phase of the business cycle, offering more confidence to consumers as a result and encouraging a more expensive night out.
The holiday is a clear contribution to our gross domestic product, which is calculated based on expenditures largely consisting of consumer spending. When consumers are spending more and saving less on Valentine’s Day, our GDP benefits. The effects of the holiday spending are further amplified by our current low interest rates.
The infographic displays consumers’ top spending categories. Even non-celebrants will be participating For the full chart of consumer spending statistics on Valentine's Day, visit Forbes.com.
Works Cited
Amadeo, Kimberly. “Shoppers Feeling the Love This Valentine's Day.” The Balance, www.thebalance.com/happy-valentine-s-day-retailers-feeling-the-love-3306043.FEBRUARY 4, 2016 | FINRA STAFF. “Love, Romance and Dollars: The Economics of Valentines Day.” Love, Romance and Dollars: The Economics of Valentines Day | FINRA.Org, 18 Jan. 2018, www.finra.org/investors/love-romance-and-dollars-economics-valentines-day.
Kurtzleben, Danielle. “CHARTS: The Economics of Valentine's Day.” U.S. News & World Report, U.S. News & World Report, www.usnews.com/news/articles/2013/02/14/charts-the-economics-of-valentines-day.
McCarthy, Niall. “The Key Consumer Spending Trends On Valentine's Day [Infographic].” Forbes, Forbes Magazine, 9 Feb. 2018, www.forbes.com/sites/niallmccarthy/2018/02/09/the-key-consumer-spending-trends-on-valentines-day-infographic/#3d1ccc3f7aa5.
I agree with your stance on how the spending on Valentine's Day for both celebrators and non-celebrators. Now that the economy is doing well after a recession in the early 2000s, the wealth effect definitively increases the purchasing power of consumers. Another factor that could play into the increasing spending each year is the marketing of companies. With Christmas and New Years being over a month before, consumers are willing to spend money again on products such as fancy dinners, chocolate, and flowers; all of which bring people happiness.
ReplyDeleteI think you make an interesting point that now since consumer purchasing power has gone up, even people not in relationships are participating in Valentine's Day which contributes positively to our GDP. Usually everyone either gives or receives something on this holiday whether you're in a relationship or not which reminds me of Christmas. I'd be curious to know how national spending on Valentine's Day vs. Christmas compares, and if Valentine's Day could be catching up to Christmas.
ReplyDeleteSimilar to Christmas, I feel like Valentine's Day is a holiday when everyone is just expected to spend money. Whether it is something for your mom, siblings, or significant other I guaranteed you either gave or received something on Valentine's Day. I definitely contributed to spending on Valentine's Day, and at Marshalls where I work, I definitely noticed an increase in little gifts, candies, and cards being bought around the holiday. On the radio, I heard that the average person spends about $30 dollars on Valentine's day. This seems like a lot, but if you think about going out to dinner, purchasing gifts, and more, these things add up quick!
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