Thursday, 22 November 2012

How February 14th Affects the Economy



                A day when the air is filled with romance and love: Valentine’s Day, a holiday where you reaffirm your relationship and gift something special. While it is an occasion for lovers to reminisce their past together, it can be also a day to express gratitude towards someone. Thus, Valentine’s Day has a significant impact on area’s economy and the total revenue generated increases yearly.

As we march towards modernity and higher living qualities, the younger generations have more freedom and gained exposures; resulting to start dating from an early age. Steadily, this leads to an increase in demand for gifts due to many lovestruck people. During this season, most firms would practice The Law of Demand, by lowering prices or promotions for their goods to rise up the quantity demanded; there is an inverse relationship between quantity demanded of any good and price charged. 

Although women usually perceive Valentine’s Day more important compared to men, men will spend almost twice as much as women: $168.74 per guy versus $85.76 per gal. This year, an estimation of $17.6 billion alone was added to the economy, thanks to stronger job growth. The higher the income, the higher the consumption even if the price remains constant.
                                                  
Written by Amy Ong

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