Enjoy Senior Discounts While They Last
I love receiving senior discounts. I got 15 percent off Wednesday’s chamber concert and 30 percent off Friday’s hot-springs entry.
These discounts represent demand-based price discrimination. Theory says such discrimination is based on employers’ perceptions of different demand elasticities across demographic groups. But are today’s seniors’ demands more elastic than those of other adults?
Their more elastic demand can’t arise from lower incomes: In 2007 the poverty rate among adults aged 19 to 64 was 15 percent, and among those 65-plus it was only 13 percent. Maybe seniors have more time to shop around, and that might raise their demand elasticities; but one can also argue that their extra leisure makes them more willing to spend on complements with leisure, such as those I’ve just purchased.
My guess is that many senior discounts are anachronisms from times when seniors were scarce and generally poorer than the average American. I don’t expect senior discounts to disappear during the recession, when firms are competing especially hard for customers; but I wouldn’t be surprised to see many disappear in the next boom, as I believe they should. After all, why should the average consumer subsidize members of this privileged group (including me)?