An economics lesson for parents in back-to-school shopping

August 10, 2007|By Gary M. Galles

MALIBU, Calif. -- Human nature often entails putting off unpleasant things. One of those often-unpleasant things is back-to-school shopping, which can mean high-volume wardrobe "negotiations" between parents and children.

The mall awaits - and so do potential shopping disagreements that can leave parents feeling frustrated and befuddled. But understanding the economics of this traditional conflict can help ease parents' trepidation.

Economics can be reduced to the proposition that incentives matter. Larger benefits or lower costs cause decision-makers to want more of something - even when the decision-makers are your children, whose rationality you have reason to question. When large differences in costs and benefits face parties who must jointly decide on purchases, disagreements arise. That is the crux of back-to-school shopping.

Who pays is the biggest source of conflict. A parent footing the back-to-school bill weighs the value he or she perceives against each item's price. But children paying none of the bill will weigh the value they place on a good against the nonmonetary price they will pay (the "price" being the exertions involved in wheedling, whining, extorting or arguing their parents into it).

Because many back-to-school items aren't worth their cost to parents but are worth more than zero to children, the kids want to spend more than their parents do. They want more, newer, better, and "cooler" things. And parents trying to teach their child "the value of a dollar" will have little luck convincing them otherwise - because the parent's money, not the child's, is on the line.

Parents and children often divide on the benefit side as well. Parents see clothing, shoes, backpacks, and the like largely through utilitarian eyes. But their children's perspective is dominated by where those items will put them in their school's social pecking order. So parents, who see many good alternatives to a particular purchase, often end up in disputes with their children who, under the influence of peer pressure, insist there is no substitute. Such conversations are liberally punctuated with the phrase, "You just don't understand."

Indeed, back-to-school shopping often involves strident confrontations because of the large gaps between the values parents and children place on the items in question and the substantial amount of money involved. But this doesn't signify anything nefarious. In fact, it is not different in kind from many other conflicts that arise from the differing incentives facing parents and children.

Why are young children more likely to misbehave in a store checkout line than at home? Because their benefits (candy, gum) are higher and their costs lower (they are less likely to be punished in public). Why are teens so eager to borrow Dad's car? Because they get the benefits without the costs (illustrated by how frequently the car returns with an empty tank). Why do kids want to eat out, despite its added expense? Because it is not their money. Why do some want their favorite clothes washed almost daily? Because it is not their time and effort. In contrast, why are they so resistant to doing chores, cleaning their rooms or washing dishes? And why do their parents want them to study more than they do? Because in those cases, it is their time and effort.

Understanding back-to-school shopping as a temporary, annual peak in parent-child conflicts will not make them go away. But it can help parents think about ways to minimize such conflicts. Giving children a fixed budget for new clothes means they are spending their own money, rather than nagging you to spend more of yours. This can help maintain parental sanity and reduce despair about what has happened to formerly "good" children.

Then you can save your stress for getting them to do their homework.

Gary M. Galles is professor of economics at Pepperdine University. His e-mail is gary.galles@pepperdine.edu.

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