Are shoes an inelastic fashion accessory?
We need shoes come rain or shine and the more shoes we have, the better prepared we are for the unpredictable circumstances we face in our daily lives. Because of this, we should buy shoes no matter how much they increase in price, because their demand will always exist – we can’t walk around barefoot. Perhaps I’m just trying to convince myself that £60 on a pair of shoes is a solid investment.
I am unschooled in The Way of the Shoe and hesitate to offer my usual unambiguous advice, but I draw the line at the use of the politician’s favourite euphemism, “investment”. I regard my lunch money as well spent, but let’s not pretend that my lunch is a hundred shares in General Electric, shall we?
To answer your question, shoes are “income inelastic” if you do not cut back much on shoes when your income falls. They are “price inelastic” if you do not cut back much on shoes when their price rises. Something tells me you think shoes are inelastic in both respects.
I would argue that a more pertinent term here is “diminishing marginal utility”. The first pair of shoes protects your feet. All subsequent pairs of shoes are merely variety. I write without fear of contradiction when I suggest that the more shoes any one person has, the more time each pair will spend at home in the shoe cupboard.
In short, whether you are wise to spend £60 on new shoes rather depends on whether you now have no shoes (the scenario you gesture towards) or whether you have a spare bedroom full of them, which I fear may be the truth.
Let’s face it, you don’t want advice from me. Why don’t you look to Carrie Bradshaw, the Sex and the City character who once explained: “My new shoes shouldn’t be punished just because I can’t budget.”
Also published at ft.com.