Photo by Hunter Quillen Gresham for Virginia Tech.
Newswise — On Valentine’s Day, people celebrate their relationships with friends, family, or a significant other. Often, the expression of affection involves monetary expenditures. Jadrian Wooten, a Virginia Tech professor in the Department of Economics, provides valuable insight on effectively managing a budget around the holiday.
“People should start by determining a realistic amount they can afford to spend on gifts, activities, or experiences for their loved ones,” said Wooten. “This needs to happen before they go shopping. It’s tempting to splurge when you’re in the store, but setting a limit creates what economists call a “reference point.” Wooten said that doing so can help determine if a gift is worth purchasing.
“Consumers most commonly spend money on gifts, dining out, and flowers for Valentine’s Day. Gifts can include jewelry, chocolates, and clothing,” said Wooten. “People are expected to spend $185.81 on average, but the variation is going to be considerable based on what your budget looks like.”
While many will spend money, Wooten discussed alternative routes for those who may not have the space in their budget. “It’s important to remember that physical gifts don’t always deliver the most impact. People should explore creative ways to celebrate, such as planning a romantic homemade dinner, crafting DIY gifts, or enjoying free or low-cost activities together,” said Wooten. “A shared experience can provide a lifetime of memories for couples.”
Trends in consumerism on Valentine’s Day have varied from previous to now. “Last year, consumers talked a lot about the opportunity to celebrate various relationships beyond romantic partnerships, including pets, friends, and colleagues. This year however, consumers are placing greater emphasis on gifts for their significant others,” Wooten said. “Even among those not formally observing Valentine's Day, 29% still plan to acknowledge the occasion in some manner.”
Additionally, Wooten shared an economic concept: signaling theory. “According to this theory, people buy expensive gifts or meals at upscale restaurants as a means of signaling their commitment and affection to their partners,” said Wooten. “By engaging in extravagant gestures and gifts, people are trying to “signal” their love and devotion. We all may be guilty of receiving an expensive gift from someone and correlating that with the amount they love us. As we get older, we realize that isn’t always true.”
- Written by Sarah Hern
About Wooten
Jadrian Wooten is a collegiate associate professor with the Virginia Tech Department of Economics and is the author of Parks and Recreation and Economics. Read more about Wooten’s takeaway on the economic impact of the Canadian wildfire crisis and climate change in his Monday Morning Economist newsletter. Wooten has been featured in USA Today, Inside Higher Ed, WJLA ABC 7 Washington, D.C., and NBC News, among scores of other media outlets. Read more about him here.
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