When I was a freshman in college, I had no idea what I was doing…pretty much when it came to everything related to college. I thought wearing sweatpants and my swimming parka to class was appropriate. I was fine with the idea that the girls on the swim team would be my only friends. For some reason, watching Primal Scream seemed like a good idea. And I thought that “Ec 10” sounded like a fun class. I mean, all of my friends were taking it, so I figured I should too.
I had taken economics in high school. The main reason I signed up for this class was because Mr. Leonard, the football coach, taught the class. And while Mr. Leonard can’t really compare with, Mr. Schuester (my new favorite teacher, on Glee) he was a favorite among the ladies (in a non-creepy way!) Unfortunately, his teaching abilities or depth of the class didn’t go much more than how to create a supply and demand graph. For those of you who are familiar with my neat handwriting and anal charting skills, clearly you know I did well in this class. So when it came time to enroll in college classes, I figured I would dominate EC 10. Unfortunately, Economics is about a bit more than graphs.
In this class, I learned that just because a professor is world-renowned in an area, it doesn’t make him a good teacher. Thank you Martin Feldstein for teaching me this invaluable lesson! I also learned that I love Indian accents. My TF (also known as a TA) was from India and I spent most of my time in section trying to hide my laughter as opposed to paying attention. Many of our examples were about the supply and demand of “pizza,” which to this day brings a smile to my face just thinking about the pronunciation.
Other than that I didn’t retain a lot of information from this class. The one term that has stuck with me is Perceived Savings. I remember learning about this, and I believe we used baseball tickets as the example. If I remember correctly, we discuss the following idea:
If you are offered baseball tickets at 50% off, you think “Wow! This is great, I just saved 50% of the cost of the tickets.” However, if you hadn’t been offered that deal, there is a strong possibility that you wouldn’t have purchased the tickets to begin with. So while you think you are saving 50% of the cost, you are actually spending more money (the cost of the tickets) then you would have if you didn’t buy them at all. So while it may seem like a deal, your savings are simply perceived, not realized.
From the moment this theory was introduced, I didn’t like it. Of course you are saving money! You are gaining the value of the tickets (say 100 dollars) and it is only costing you 50 dollars. That is a deal! Who cares that you are out 50 dollars… you now have the experience of attending a baseball game (Go Red Sox!) AND the knowledge that most everyone sitting around you at the game paid twice as much as you did for that same experience. If that isn’t a win-win situation, I don’t know what is.
I experienced actual savings this weekend. Matt and I made a trip to Banana Republic for some new jeans. I left the store with the following:
– Jeans: originally 79.95 – I paid 35.50 (Savings of 44.45)
– Cardigan: originally 69.50, I paid 29.25 (Savings of 40.25)
– Tights: originally 25.00, I paid 18.75 (Savings of 6.25)
– Tee Shirt: originally 20.00, I paid 3.95 (Savings of 16.05)
– Skirt: originally 59.50, I paid 17.95 (Savings of 41.55)
– Black pants: originally 59.50, I paid 30.55 (Savings of 28.95)
So, what should have cost me 313.45 dollars, actually cost me just under 150 dollars (stupid New York taxes). Or in other words, I saved 163 dollars, or 52%. What a deal! And while some (aka Matt) might think that I spent 150 dollars that I didn’t really need to spend. I can assure you, the enjoyment that I will get out of my cute new clothes and the value that I place on getting “good deals” far exceeds the 150 dollar charge that is now residing on my credit card account!
If there is one good thing about the recession, it is the amazing sales that you find on a daily basis. My wardrobe has certainly benefited from these troublesome economic times.