Memory as a Consumer Durable

More

Garett Jones - Economist at George Mason University. You can follow him on Twitter: @GarettJones

According to the arcane conventions of economic statistics, a "consumer durable" is any physical product that lasts longer than three years: cars, fridges, computers (Strangely, Levi's don't count as a durable). 

Normal economics has two pieces of advice about how to buy consumer durables:

1.  Buy them when interest rates are low (cheaper to borrow the money; and you weren't going to earn anything at the bank anyway).  

2.  Don't buy them when your income takes a one-time hit (if the 'crops' have been bad the last few years--like they've been since the Great Recession--it's best to focus on buying things that get used up: food, haircuts, doctor visits; you can keep driving the Corolla). 

Recessions are times when 1 and 2 usually push in opposite directions, but in practice 2 wins the battle: Durable purchases collapse in a recession

But the idea of a durable is more important than any official definition: And memory, wholly intangible, is quite durable. 

People often shrink from driving to a distant, promising restaurant, flying to a new country, trying a new sport--it's a hassle, and the experience won't last that long. That's the wrong way to look at it. When you go bungee jumping, you're not buying a brief experience: You're buying a memory, one that might last even longer than a good pair of blue jeans. 

Psych research seems to bear this out: People love looking forward to vacations, they don't like the vacation that much while they're on it, and then they love the memories. Most of the joy--the utility in econospeak--happens when you're not having the experience. 

Vacation purchases jump around just the way you'd expect if they were a durable: People spend a lot less on them during recessions, about 15% less in the Great Recession. Food spending, by contrast, only fell 5%.

So people treat memories somewhat like durables, but most of us could do a better job of it. Yes, it'll be a hassle to find that riad in Marrakech when your GPS fails you, but complaining about it with your sibling years later will be a ton of fun. Get on with it. 

A corollary: if memory really is a durable, then you should buy a lot of it when you're young. That'll give you more years to enjoy your purchase. 

So it's worth a bit of suffering to create some good memories, since the future lasts a lot longer than the present. Bob Hope and Shirley Ross figured this out, reminiscing over their failed marriage:

And thanks for the memory

Of sunburns at the shore, nights in Singapore

You might have been a headache but you never were a bore

So thank you so much.

Yes, it's only a song from a movie.  But it's pretty good social science. 

Jump to comments
Presented by

Megan McArdle is a columnist at Bloomberg View and a former senior editor at The Atlantic. Her new book is The Up Side of Down.

Get Today's Top Stories in Your Inbox (preview)

Why Are Americans So Bad at Saving Money?

The US is particularly miserable at putting aside money for the future. Should we blame our paychecks or our psychology?


Elsewhere on the web

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

The Death of Film

You'll never hear the whirring sound of a projector again.

Video

How to Hunt With Poison Darts

A Borneo hunter explains one of his tribe's oldest customs: the art of the blowpipe

Video

A Delightful, Pixar-Inspired Cartoon

An action figure and his reluctant sidekick trek across a kitchen in search of treasure.

Video

I Am an Undocumented Immigrant

"I look like a typical young American."

Video

Why Did I Study Physics?

Using hand-drawn cartoons to explain an academic passion

Writers

Up
Down

More in Business

Just In