Getting Married? Then Get Ready for Price Discrimination

(Comstock)

A reader named Elliot Millican writes in to say:

At one point in SuperFreakonomics you mentioned a particular brand of hair clippers that are offered for humans and for pets. You noted that the human clippers carried a higher price even though they appeared almost identical. You went on to say that the pricing scheme is a simple result of the consumer’s willingness to pay more for their clippers than they would their dog’s. [Yes indeed: this is known as price discrimination.]

These hair clippers reminded me of something I experienced when my wife and I were engaged (8 years ago). Let me quickly give the background: due to limited wedding budget, we had our wedding at church and a reception at the church with cake, punch, and light food. This allowed us to invite as many people as we wanted because the church was free and the cake/food prices weren’t terribly expensive. But we had a second reception just for family and wedding party at a hotel (for about 60 people). This second reception was more like your traditional wedding reception… open bar, sit-down dinner, and a DJ. In short, it was expensive, but affordable with only a fraction of the guest list.

While still engaged, we attended a wedding for some friends. We really liked the DJ at their reception so I approached him and asked about availability and pricing. He quickly stated that he charges a minimum of $500 for wedding receptions, and the price goes up if it’s more than 3 hours. So I responded by saying that we needed him for music at a family dinner after our wedding reception, not for the reception itself. I made it clear that no cake would be served, no tossing of the bouquet, etc. Just dinner and dancing. Without negotiating, he dropped the price to $350 for a 3-hour reception.

My wife and I were enlightened. We were no longer planning a wedding. We were planning a party. You pay at least a 25% premium for anything that has to do with a wedding. The major expenses we saved money on were flowers, food, DJ & the reception hall at the hotel. Apparently, the wedding industry knows that couples are prepared to spend money on their wedding, so they help the bride and groom in that endeavor.

I don’t know if there’s been any empirical work into price discrimination surrounding weddings — hey econ grad students, pay attention! — but here’s a short investigation from an Australian consumer watchdog that finds higher prices for the venue, photographer, cake, flowers, etc., once a wedding is being involved. I can only think of one activity that’s more prone to price discrimination: funerals.

Thanks, Elliot


Mike B

Wow, that's a great idea. There isn't much that is specific to a Wedding that cannot be purchased almost identically for a party. For example purchase a generic "party cake" then just apply the bride and groom yourself.

The only possible pitfall would be if one of those getting married (or their family) found attempting to save money on the wedding to be counter to the spirit of weddings and insisted on paying more. If this happens to an economist it might serve as a good litmus test to the long term viability of the union. One passive-aggressive strategy that falls short of calling off the wedding would be to go ahead and arrange the less expensive "party" and then during the event just set a pile of cash on fire to appease those who wanted to pay more.

Eric M. Jones.

That's not a nice thing to do. I would certainly feel slighted if I had gotten the low-rent option from you. Didn't your wedding guests give you some cash?

Sounds like you cheaped out on this important day.

Ben

Aside from weddings and funerals, anything related to babies is always overpriced as well. Of course, the Freakomics team already looked at car seats preying on a parent's over-protective nature, but I think that there are all sorts of these kinds of baby products that parents pay a mint for: bottle sanitizers, super fancy strollers, disinfected place mats to stick on restaurant tables, video baby monitors, etc. etc. etc. You almost feel a like a bad parent if you don't get all of this stuff, but much of it is unnecessary at worst, and overpriced at best. I would be interesting to check whether there is price discrimination that singles out first-time parents. I know that I've wisened up a lot since my first baby.

Joe Dokes

Ben,

You are partially correct about babies. People do overspend, ON THEIR FIRST KID. It's all downhill from then on. First kid, you sanitize EVERYTHING, you buy the best of EVERYTHING, you worry about EVERYTHING. Number two, not so much. By Number three, you're saying things like, "Boys can wear pink, right?"

Regards,

Joe Dokes

TA

I remember there was an article in the Washington Post a few years ago that touched on this wedding. One of the people interviewed told about how she had rented a limo without saying it was a for a wedding. When the driver pulled up at the church and saw what was going on, he refused to let the happy couple in until they had forked over the extra cash for the wedding package, which included two cheap plastic wine glasses.

Mike K.

Could much of this price differential be put down to paying for lawsuits brought by unhappy brides? If there's a glitch during a wedding, things can get nasty more quickly than if it's just a party.

Robert Govier

I'd suggest that the price premium is due to the additional risk that a wedding entails for the provider. If you screw up the food/music/etc at a party, then you'll get some grief, but if you ruin the day for the bride by providing the wrong color flowers/drop the cake/have DJ equipment failure, then you'll likely incur significant reputation damage. I'd assume there'd also be similar insurance premium uplifts to wedding suppliers for the same reason.

Joe Dokes

This is not the first time I've heard of price discrimination in the case of weddings. Based upon my experience with the various costs associated with weddings it is quite clear to me that at every step in the nuptial process vendors charge a premium.

Call it the bridezilla premium if you will. The premium may come from a number of factors including, the aggravation caused by dealing with the histrionics of the bride. The fact that brides and grooms tend to be young and dumb especially with other peoples money. The fact that emotions are involved that cloud sound economic judgement. In addition since this is a "once in a lifetime" event, people are naturally inclined to overspend, encourages vendors to charge a premium.

Regards,

Joe Dokes

Tom

On a somewhat different note - but very relevant to freakonomics - is another question: why are men still getting married, considering the incredible financial liabilities vs zero positive effect on their life?? As an eternal bachelor with a rational and analytical mind, this questions has always baffled me...

A married man (especially with kids, and especially in the US) finds himself in a very dangerous situation wherein his entire life (kids, house, savings, pensions, income, freedom, sometimes sex) are entirely at the mercy of his wife. For these men, the constant threat of divorce is not unlike the threat of a nuclear attack in geopolitics: the threat is enough to completely change the nature of a relationship - and it is hard not to see how the married man with kids (in the US) is basically stuck in a very abusive relationship.

Why would any man subject himself to that is beyond my comprehension??? Over half will end up having their kids, their wallets, their future, their sanity and their balls savagely ripped from them; the other half will just learn how to say "yes dear".

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Greg

As usual, when you're faced with an apparent paradox, best to examine your premises.

(Also, you should update your mental picture of the current divorce rate - you're a few decades behind.)

Tom

I think it is the other way around: unfortunately, too many men are quite unaware of what the "marriage contract" means in the US. If they knew, they would not get married, I think ignorance is the only explanation here.

Do men know that they can be summarily evicted from their home, if their partner states that "she is afraid" (no claim of violence, real or imaginary, is required)?

Do men know that their children can be summarily "kidnapped" by the mother (with the full and militarized assistance of the state), and even their so-called "visitation right" is in fact a privilege granted by the ex-wife, for there is no practical fast and affordable remedy if she refuses to comply with the visitation order?

Do men know that the typical child support order is at least 40% of their after-tax income? Do they know that they have to pay taxes on it, but the recipient (ex) does not? do they know the money can be used for any purpose?

Do men know that the procedure to lower a child support order after a job loss takes months, costs thousands and fails over 90% of the time? Do they know that the inevitable failure to pay will land them in jail, where their debt will grow and grow? Do they know that child support debt can never be erased, not even by banruptcy, not even by a family court (Bradley Amendment)?

Do men know that each year thousands of men commit suicide after going through the above? Do they know that men used to make 50% of suicides 40 years ago, and now they make 85%?

I am not married or divorced (and I am not planning to be), but I have seen my fair share of divorces, and there is no question in my mind that what the family (kangoroo) courts are doing to men is nothing short of a massive crime against humanity. Hopefully, some day history will look on "family law" of contemporary America in the same way, we look at slavery today

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Greg

It surprises me that nobody has yet mentioned one quite valid reason why DJing at a wedding is more difficult than DJing at a typical party: at a wedding there are many scripted events, some requiring specific music, that the DJ must plan around. That's more challenging than playing whatever music you like for a few hours.

Jeff Yablon

So, different markets command different prices? You betcha.

I once spoke to a contractor about having a roof re-done in Westchester County, NY. He quoted a price that he SPECIFICALLY ACKNOWLEDGED was more than double what he would ask for in neighboring Rockland County.

Thank goodness most people don't have to do their own home repairs her in NYC. Although at least this explains why everything costs so much!

Jeff Yablon
President & CEO
Answer Guy and Virtual VIP Computer Support, Business Change Coaching and SEO Consulting/Search Engine Optimization Services

Joshua Northey

My wife and I held our wedding for 150 people for $3500 2 years ago. We did everything fairly inexpensively be doing the work ourselves. It worked well.

The place we really saved money was on food.

Ask yourself "where does a caterer get their food?".

I called a couple local grocery stores and said I was catering an event for 150 people. They had a whole list of stuff you could buy in bulk. It was amazing. You could by pounds of lettuce shredded or unshreded for less than 1 head costs in a store, pounds of onions cut or uncut for less than 1 onion. The minimums were often only 1 pound or 3 pounds.

So you could get salad for 150 people for the same price it would cost at the store to get salad for 10.

I think the food came out to something like $15/person and it was delicious and there was tons of it.

Ian

As a DJ, the reason why the Reception is more than the party is because a typical wedding reception involves the DJ mcing the party. This includes a formal intro of the entire wedding party (sometimes 20 people with wacky names), managing the toasts, cake cutting (All of these can have specific music and cues btw), first dance, bridal party dance, anniversary dance, dollar dance, bouquet, taking the garter off, tossing, putting it on, last dance and so on. A 3 hour party where I just play music vs. a 3 hour wedding are two completely different animals.

kurie

"No, see, this is the *wedding* cake."
http://www.youtube.com/watch?v=gimiDBAK2wA
and
http://www.youtube.com/watch?v=6ff13zZ0h0k

Amelia

Who hasn't seen a story in the newspaper about an unhappy couple who are mad at a wedding vendor for stuffing up some element of the 'best day of their lives'? The premium comes from the professional risk attached to making a cake, driving a car, videoing etc for that clientele vs regular customers.
Nevertheless..I was offended by some of the prices I was quoted by vendors. All the wedding traditions are optional so if you're prepared to be flexible then you don't have to get price gouged.