Income Elasticity and Pam and Jim

Textbook Definition of Income Elasticity: The percentage change in quantity demanded of a good when income rises by 1%; a measure of whether a good is "normal" or "inferior."

She-conomic Definition: Assume that "income" is the financial, physical, and emotional "resources" an individual possesses (e.g., self-esteem, money, sex appeal, intelligence, etc.) as means for "purchasing" or attracting dates. When income rises, demand for "normal goods" (dates with "higher-quality" people) rises, while demand for "inferior goods" (dates with "lower-quality" people) falls.

For example, in The Office, when Pam's "income" rises (i.e., when her self-confidence grows in Season 3, as evidenced by her bravery in the Beach Games episode), she reduces dating activities with low-quality men (Roy) and increases dating with high-quality men (Jim!).

I mentioned a few examples of factors that might constitute "income." Can you think of anything else that might add to an individual's "date purchasing power"? How would you describe an "income-normal" man or woman?

The Second Law of Demand and Why Long Distance Relationships are Hard

Textbook Definition: The demand for a product becomes more elastic over time when individuals have more time to find substitute products.

She-conomic Definition of the Second Law of Demand: Assuming that nothing external occurs to continually shift out her demand for marriage to Elder "John," Mary's demand for marriage to her missionary becomes more elastic over time, as she "waits for him" in Provo, becomes more open to dating, and discovers substitute boyfriends in the months following Elder John's departure to South America. Also note: John may also grow less fond of Mary over time as proselyting, service, and the fascinations of the Amazon divert his attention and act as "substitute" goods for marriage to Mary.

I don't mean to bring up a sensitive subject, since I'm sure many of you have been seriously hurt by Marys (or the male equivalent). That said, I wonder how much the Second Law of Demand explains entry and exit of participants in relationships? This begs the question of what men and women can do to avoid the temptation of "substitution" (ahem, cheating? adultery?) in relationships. More on this later.

Substitution, Relative Prices, and Date Selection

Textbook Definition: Closely related to the First Law of Demand, substitution occurs when the relative price of a good increases; e.g., if the price of butter rises, I "substitute" margarine for butter.

She-conomic Definition: Suppose I'm interested in two boys: Kurt and Mark. Suppose I go on one date with Kurt but learn that he is still romantically attached to his sister missionary girlfriend, and I also learn that he expects would-be girlfriends to make dinner for him on an every-other-day basis. From my perspective, the "price" of dating Kurt has gone up, because I now have to deal with his emotional baggage, as well as the financial and time costs of kitchen duties. In response, I "consume" fewer dates with Kurt and "substitute" toward Mark (i.e., start flirting with and spending more time with Mark--the substitute good.)

In my experience, substitution occurs all the time in dating--often times during the "crush incubation stage," before a guy and a girl ever even go on a date. So next time your roommate asks you why you haven't pursued Kurt (or Kristin, whatever the case may be), your answer is not, "I found his laugh unattractive," "he is insensitive to widows and children," or "he has no ambition." Quite simply, your budget constraint for Kurt shifted inward and consequently, the relative price of Mark decreased.

(*Kurt and Mark aren't real people, by the way. Nor are any of the names/people discussed on this blog.) Peace.

Own-Price Elasticity and The Notebook (SPOILER ALERT!)

Textbook Definition of Own-Price Elasticity: The percentage change in quantity demanded of a good when the price of that good changes by 1%; a measure of the responsiveness of demand to changes in price. Demand is considered "elastic" if the absolute value of elasticity is greater than 1. Demand is considered "inelastic" if the absolute value of elasticity is less than 1.

She-conomic Definition: Suppose the price of a date with a girl is the monetary cost of the date (dinner and entertainment expenses, for example), as well as the emotional and mental effort of obtaining and carrying out a date. In The Notebook, Noah's demand for a date with Allie is highly inelastic; even though initially she had a boyfriend, lofty material expectations, and no more than lukewarm interest in Noah, Noah's demand for a date with Allie hardly shrinks in spite of changes in "price." Allie's demand for marriage to Lon, however, is relatively elastic. As soon as she rediscovers Noah, the opportunity cost (price) of being with Lon rises, and she responds rather dramatically by decreasing her demand for Lon (i.e., dumping him) and substituting toward Noah.

What are your thoughts? Is it kosher to attach economic principles to beautiful love stories like Noah and Allie's, or did this post just ruin the sappy joy of your favorite chick flick experiences?

First Law of Demand and Divas

Textbook Definition: All else being held equal, an increase in the relative price of a good decreases the quantity demanded of that good; a decrease in the relative price of a good increases the quantity demanded of that good.

She-conomic Definition of First Law of Demand: Assume that a market exists for "dates with Rachel," and men are demanders of dates with Rachel. Suppose that Rachel is high-maintenance and that the "price" of a date with her is the dollar value of what she expects in a date: a fancy dinner, a movie, a ride in a BMW, a diamond ring, and a high-end dessert. If Rachel complains about not getting asked out, she can increase the quantity demanded of dates with her by becoming less fussy and accepting a lower price (e.g., dinner at a fast causal joint and watching a movie at home.)

Can you think of any Rachel- (or "Raymond"-) types, and if so, does the quantity of dates demanded with them seem to be inversely related to fluctuations in their "high-maintenance" level? If not, can you think of external factors unrelated to "price" that might affect demand for dates with certain individuals? (Econ 110 students: keep in mind the difference between change in "quantity demanded" and change in "demand--moving along a demand curve vs. shifting the curve in or out).

Negative Externalities and PDA

Textbook Definition of Negative Externality: An external cost resulting from the private actions of individuals

She-conomic Definition: Negative externalities may result in public places, like church, when that one engaged couple sitting in front of you can't sit through the meeting without repeatedly scratching their partner's back, whispering sweet-nothings in their sweetie's ear, and not-so-discretely fawning over (and showing off) the fiancee's shiny ring. I am really not bitter about this, (especially since I have probably been guilty of creating similar externalities in public with honorable ghosts of dating past), but I think this is a perfect example of a negative externality.

Can you think of any other examples? Besides externalities created by a guy and a girl as a couple, can boyfriends/girlfriends impose externalities on each other?

Positive Externality and Friends-of-Friends

Textbook Definition of Positive Externality: An external benefit resulting from the private actions of individuals

She-conomist Definition: As a result of your roommate being in a relationship with "John," you happen to become acquainted with John's roommate, Steve. Sparks fly, hands/lips unite, and dating magic occurs. Roommate and John's relationship : private actions of individuals :: your relationship with Steve: external benefit (externality)

For those of you who have seen The Holiday, how did Kate Winslet's decision to rent out her cottage to Cameron Diaz, and Cameron's resulting interactions with Jude Law constitute a positive externality situation?

Can you think of any other examples of positive externalities associated with dating? Any success stories?