Philippe Lopez/Agence France-Presse — Getty ImagesEconomics can help make your Valentine’s Day more successful, a Stanford economist writes.
Paul Oyer is a professor of economics as Stanford University’s Graduate School of Business and the author of “Everything I Ever Needed to Know About Economics I Learned From Online Dating.” He answered questions about the book in a recent post on Economix.
When most people think of the economics of Valentine’s Day, they think of the large amounts of money people spend ($130 per person, on average).
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But economics can also tell us how to make Valentine’s Day special for our significant others. We economists may have taken all the fun out of Christmas, but I think we can make Valentine’s Day more successful. Here’s how. 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 and, in the words of Stephen Stills, “love the one you’re with.”
Tip #1: Signal your love
“Signaling” in economics means figuring out a way to show another party that you really mean what you say. In many cases, the best way to signal is to make a wasteful investment. This shows you are willing to spend a lot to demonstrate your credibility, and it separates you from those who will not expend that cost. For example, signaling is valuable in the education world, where an early-decision application shows a college that a student is particularly attracted to that school. According to some analysts, a business can also make good use of signals by underpricing its stock when it goes public to show that it is a good investment.
So what does this have to do with Valentine’s Day? Start by asking yourself, “What do I want my partner to think upon receiving my Valentine’s present?”
Suppose you buy your significant other a dozen red roses or a box of chocolates. She is likely to think, “All right, he cares about me enough to buy the obvious present.” Sixty-four percent of men buy flowers on Valentine’s Day, so giving flowers signals that you are like two-thirds of men. This is roughly the equivalent of writing “hb” on your mate’s Facebook wall on her birthday: it shows that you remember, and that you are willing to spend approximately seven seconds conveying that fact.
So how do you say “Honey, I really care about you, and you are very special to me”? Put your resources where your mouth is. You don’t have to spend a lot of money, but to credibly signal you really care, do something personal. Cook something she really loves, take her to see a movie you know she will love and that you will hate (possibly something starring Sarah Jessica Parker), or do some unpleasant chores around the house that she has wanted done for a long time. These gestures show that you really do care for her, and they can separate you from other guys who care about their mates, but not that much.
Tip #2: Make your partner happy by spending on yourself
Once you’ve figured out a creative way to credibly signal your affection, it’s time to expend some resources on yourself. Studies show quite clearly (though you don’t really need a study to back this up) that people are more attracted to partners and potential partners who have certain desirable characteristics. For example, one study of an online dating site found that a man who makes $250,000 per year, holding other things equal, is contacted two and a half times as often as a man who makes under $50,000. Men, on the other hand, tend to be more focused on women’s looks. According to an analysis of its own users, the dating site OKCupid found “a hot woman receives roughly 4x the messages an average-looking woman gets.”
You have to tailor this to the tastes of your partner, of course. Not all men care so much about looks (O.K., maybe they do) and not all women care so much about money. Some people appreciate education, a taste for certain books, or cooking ability, for example. But let’s say you are a typical man who could make your partner happier if you increase your income. How should you do it?
Labor economists have shown that more than anything else you can control, education increases income. An additional year of education, all else equal, leads to about 8 percent higher income every year for the rest of your working life. So, if you really want to make yourself more attractive this Valentine’s Day, spend some time in the classroom so that you can earn more.
But if going back to school is not feasible, there is another way. Research also shows that better-looking people make more money.One study, for example, found a “beauty premium” and a “plainness penalty” of 5 to 10 percent each. This means a very attractive person will, on average, outearn an unattractive person by up to 20 percent. So you can make yourself more attractive, both physically and through your earning power, if you spend Valentine’s Day getting a better haircut, working out so you get more toned, or buying yourself some new and pleasing clothes. Just tell her, “I love you so much, honey, that I’m buying myself that sport coat.” (Though you may want to wordsmith that declaration a bit.)
Tip #3: Love the One You’re With
Though scientific evidence on this is scant, informal studies claim that Valentine’s Day is a common breakup time. The day, and the hype leading up to it, may remind people that their current mate is not perfect — he or she is not “the one.”
Economics tells us that in many markets, we have to keep searching until we find something that is really good. We especially spend a lot of time looking for just the right house and job, not to mention clothes, groceries and other regular purchases. But you also have to know when to stop searching because, just as you will never find the perfect job, you won’t find the perfect life partner. That person is simply not out there. Breakups have costs. There’s the emotional toll, of course, and then there is the use of time and resources looking for your next partner.
So, before you let some Valentine’s ideal lead you to look for someone better, think a bit more methodically about the costs and benefits of moving on. I am not suggesting staying in a relationship that is abusive or otherwise clearly dysfunctional. But just as every job has downsides and every house has a few quirks you would rather not have, every life partner is less than ideal. The costs of accepting someone really good are often less than the costs of being lonely while you wait for someone better to come along.
This Valentine’s Day, show your affection through economics. Signal how much your mate means to you through a carefully thought out and personalized gift. Then make your mate even happier by investing in yourself. Finally, stop and appreciate your partner – “The One” may not exist, but that doesn’t mean your partner is not “A Really Good One.”
via:http://economix.blogs.nytimes.com/2014/02/13/how-to-be-a-better-valentine-through-economics/
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