Comments on: Dear Irrational (did my house cause me to spend too much?)

By: robert

robert — Thu, 03 Jul 2008 06:22:40 +0000

The average new construction buyer spends 10-15% of the purchase price over the first 12-18 months furnishing, decorating, landscaping and CHANGING the house they just purchased.

So, Bob’s experience is typical.

By: okl

okl — Tue, 01 Jul 2008 13:16:47 +0000

“The idea is that once you get used to spending at a certain level, you create a new way of thinking about it….. ”

Good one.

By: Anittah Patrick

Anittah Patrick — Sun, 29 Jun 2008 13:41:15 +0000

[My guess is that exposure to these new experiences like schmancy din-dins negatively impacts the utility derived from the original experiences. So, say that u(23,3*) is the pleasure someone who is 23 gets from a place that's a 3 star restaurant. This 23 year old has no data points for 4 or 5 stars so the u is not yet established. But over time, as this 23 year old gets older and starts to collect more data from 4 & 5 star establishments, my guess is that the utility once derived from three star restaurants is now lower.

Part habituation, perhaps ... anyhoo, an interesting question that Bob raises.

By: Anittah Patrick

Anittah Patrick — Sun, 29 Jun 2008 13:35:37 +0000

Ooh, another topic, yes, but an interesting one!

My two cents: in the corporate world, when being wined and dined by vendors who think nothing of dropping thousands on a lavish dinner in order to secure a $20MM deal … it’s hard to head home to one’s mouse-ridden apartment in an outer borough after justing having clicked one’s heels to marble floors and stuffed once’s face with lobster tails (plural).

My personal experience is that exposure to expensive tastes creates a craving for more of the same. [I just read some related cultural theory but can't remember the author.] Unfortunately (or fortunately) this meant that after a steady stream of corporate meals, I was only interested in dating men who could afford to take me out on similar dates, which meant I had to start getting more expensive haircuts and buying nicer dresses.

It’s also harder to have to get a crappy hotel room on your own dime when you’re used to swanky digs while on business travel.