Tuesday, July 15, 2008

Economics of Love

AS my fine professor of economics at Columbia, C. Lowell Harriss (who just celebrated his 96th birthday) used to tell us, economics is the study of the allocation of scarce goods and services. What could be scarcer or more precious than love? It is rare, hard to come by and often fragile.

Everybodys Business - Lessons in Love, by Way of Economics - NYTimes.com.

This is an interesting article in which the author offers lessons in love by the way of economics. Let me try to add a lesson or two to the mix:

– Elasticity: in economics elasticity measures the response to price change. If demand for a product is elastic then a price change will cause a change in demand. If demand is inelastic then price change (usually up) will not lead to change in demand (usually down). Necessities such as water or petrol to some degree are fairly inelastic; even when prices go up, people have to consume them.

So is love elastic or inelastic? As much as we would like to believe that love is unconditional, healthy relationships don't take love for granted and treat it as an elastic product that will be affected by how much is put into it (the price).

– Compliments and substitutes: in economics a product or service can have compliments (car and petrol) and substitutes (car and public transportation). A compliment sometimes is necessary, and if it is not available you may have to use a substitute (if you run out of petrol you may have to use public transportation). Love however, has many compliments but no substitutes. So make sure you always compliment it with care, kindness and affection lest you lose it.

Oh one more note to self and this applies to both love and economics: talk is cheap, so put your money (and action) where your mouth is!


Dhari said...

nice article and i believe that love (relationship) has to be worked on and it doesn't nourish by itself. So give it a fuel of compliments :)

jaded said...

interesting, i like the way relationships are (in a sense) treated as formula and systematic, sometimes its good to think of things less emotionally, and just recognize the main issues, i wish i could train myself to think slightly less, and do more. a good read.