Postponable Luxuries

One of the more unsettling aspects of the way the crisis has played out so far is how powerful and far-reaching the fallout has been.

For example, while it might be obvious in hindsight, I, for one, did not expect the crisis to transform a country like Iceland from a thriving up-and-comer to an unstable backwater within a matter of months.

Certain other developments have been much less dramatic, though are interesting, nonetheless. These include changes in American's spending habits, whether voluntary or otherwise.

In "What Else Acts Like Cheap Wine and Cigarettes?" the Freakonomics Blog gives us a taste of how the new economic climate is turning what were believed to be necessities into postponable luxuries.

It’s interesting to see how people’s spending patterns respond to a (presumably) temporary decline in income during the recession.

Which items are more or less income-elastic in the short run? A pediatrician friend of ours mentions that he is seeing less business; when there are three kids with coughs, for example, a parent will bring in one, get him diagnosed, then treat the other two the same way at home — thus saving two co-payments.

The Austin marathon, the biggest race of the year, will not have its usual corporate sponsors, and thus no elite runners either. I expect that, as in the last recession, there will also be a large decline in plastic surgeries.

All of these appear to be postponable luxuries — and I wonder what are other weird examples? Also, aside from the usual suspects (grocery purchases being the standard example), what else doesn’t decrease much? Pornography, cigarettes, cheap wine?

Comments

[mg]

Come on, we (Icelanders) are not at "unstable backwater" level yet!

All we did was to force one ruling party (the social dems) to break the coalition with the other ruling party (the conservatives) and forge a new coalition with the left green party (with support of the progressive party). And we are getting an election in about 60 days or so. All very democratic so far.

Chin up!

[Tom]

Guns and ammunition are bucking the trend so far, with price and demand skyrocketing

[YT]

Are you kidding about groceries?
We are buying significantly less groceries and just eating less. Can't afford to buy food.
Fiance' just lost job.

[Charles W Bartholomew, DDS]

Not sure what is going on here in Kokomo, we have an economy based on automotive industry, Chrysler and Delphi with heaping layoffs, yet everytime I drive past the local favorite eateries, the parking lots are packed. If I were to judge by "parking lot" market research I would never dream this town was in the middle of a recession, this is not the case at other business except for the Goodwill store. Are people drowning their economic sorrows with food?
I am a well reimbursed professional and I still think eating out is a luxury. Either I am out of touch with reality or perhaps it is the other way around.
What my eyes see does not confirm what I read and see on the news. Dentist in the "City of Firsts"

[j]

j

[Robert McGregor]

I would think massage therapists and psychotherapists would be hurting. Unless of course, one needs the massage therapist to treat serious pain, or the psychotherapy sessions in order to keep from committing suicide.

[Marion Shaw]

Having raised five children in the era where my genera-
tion had only one, or two at most, I made some observa-
tions about the poverty line which we were technically
under. If you can access antibiotics for desperately
sick children; can get a bone set if it is broken; and
have access to flushing toilets and running water, you
are still a long way from poverty, disease and chronic
hunger. However, with the loss of any of the major
three, it does not take long to sink into an uncivilized and desperate state. Of course, that is not to say that the childen (and parent's) teeth will hold up to middle class standards.

[Boom2Bust.com]

Speaking about luxuries, what about their escalating prices? Two of my favorite things in the world, satellite radio and cigars, are going up in price. Most notably cigars, which will see a federal tax of a nickel per cigar raised to forty cents a stick due to the S-CHIP legislation that was recently signed into law. We're told that consumer prices in the U.S. remained flat over the past 12 months, but I'm not seeing this with luxuries or otherwise.

[junior]

Cigarettes? Are you kidding? I'm up to a pack and a half a day; too stressed out from scrambling to keep my company afloat to care.

The upside? It costs less to feed me since I hardly even want to eat anymore :(

Strange how this works. And fascinating.

And yes, all accounts are the survivalists are storing up on guns and ammo - a friend flippantly told me about a local Wal-mart shortage after Inauguration Day, I thought they were telling me a joke only a conservative could appreciate, turns out they were dead serious...