Memory as a consumer durable

From Garett Jones, now guest-blogging (!):

…the idea of a durable is more important than any official definition: And memory, wholly intangible, is quite durable.

People often shrink from driving to a distant, promising restaurant, flying to a new country, trying a new sport–it’s a hassle, and the experience won’t last that long. That’s the wrong way to look at it. When you go bungee jumping, you’re not buying a brief experience: You’re buying a memory, one that might last even longer than a good pair of blue jeans.

Psych research seems to bear this out: People love looking forward to vacations, they don’t like the vacation that much while they’re on it, and then they love the memories. Most of the joy–the utility in econospeak–happens when you’re not having the experience.

Vacation purchases jump around just the way you’d expect if they were a durable: People spend a lot less on them during recessions, about 15% less in the Great Recession. Food spending, by contrast, only fell 5%.

Read the whole thing.

Comments

Strange to call memory "durable" given how, every time we recall a memory, we unconsciously alter it. They feel durable, but they are highly malleable and inaccurate, Still, for this purpose, it doesn't matter if the memories really reflect the events one is trying to recall.

+1
It is well known that memories get re-created over time. This does not imply that we should not create the initial memory in the first place. But there is something more profound than merely collecting mental images. If I travel to an exotic destination I am also learning something about myself (an econometrician would say that traveling is an instrument allows us to disentangle what is the environment and what is my self). More importantly, people travel because they want to build a personal history that says that they have seen the world, and they are a provincial boring person. So I can tell you about my trips to very exotic locations, and how happy I was. And I was, indeed, happy. But I cannot really say that I was happier that the weekend in which my wife and I sat in our living room sipping wine and watching the whole season of The Good Wife in DVD. That weekend tells the story of someone lazy, provincial, superficial, etc. In other words, it associates me to traits that I don't like whereas traveling links me to traits that I (and others) like. Traveling is not just about the memories. Traveling is an act of consumption that helps us build our personal story and identity.

Related point: why do people take pictures of trips? To remember? To remember accurately? To make sure it actually happened?

Durable's depreciate.

Well cars are durable and yet no two trips are quite the same.

I'm quite willing to believe that memories are re-created; after all, my memories are not exactly video-blogs.

I always thought memory was the best explanation for time-preference.

I've said for years that it's a mistake to wait until you retire to take all those trips to those dream destinations. If you take that trip when you're 22, you could have a good 60 years to savor the memories. (Of course, you also lose the compounded savings you could've made if you'd worked instead of traipsed around the world, so there are tradeoffs here.)

And it has to be something memorable, like a trip. Or even a gourmet meal or a Broadway play, if in your lifetime you will consume few of those items. But if you're doing those things even just once a month, after several years the memories will no longer be distinctive. You could probably go to a pretty good restaurant instead of the gourmet one and ten years from now you wouldn't remember the difference.

I think monetary income does have declining marginal utility. The starving students who go to just one gourmet restaurant will likely remember that meal for the rest of their lives. The millionaire who goes to the same restaurant, for the umpteenth time out of umpty-ump times, won't even remember that meal after a few months. (Unless he or she is one of those gourmet idiot savants who remember everything they ate, forever.)

The other issue is that when you're 65 you can't do the things you did when you were 25 anymore. Physically, obviously, you can't fling on a backpack and just set out. But also mentally, as old people don't enjoy taking the kind of risks that make traveling an adventure. So they end up on group cruises with 80 other old people, walking in a large gaggle as some tour guide drones on.

It's very easy to underestimate the value of being young.

MKT is right. I still remember some of the fancy meals that I went out on as a graduate student as part of a group entertaining visiting workshop presenters. I don't remember the lecturers, but those restaurants were absolutely not a part of my then budget set. Now they would be a tiny bump in my road. On vacations, I am an advocate of spreading them out over time. They provide a positive and pleasant anchor for memories: "Yes, I think we bought that t.v. the year that we traveled in Thailand," etc.

I very much enjoyed that post. In my twenties I didn't take enough vacations, but had a sneaking suspicion they were worth every penny. Finally in my thirties, the trip around the country that lasted all summer - truly memories for a lifetime. It was even worth the swollen knees afterward that resulted from sliding into a little tent most every night.

MKT suggests that you were doing it the right way. Had you taken more vacations, each one would have been less novel and therefore less valuable to you. I think this is basically right. In contrast to you, I travelled a lot in my twenties and a lot of what I did is lost to time. Novelty is key.

I freeking hate taking vacations. I don't know why everyone else seems to love them. They are incredibly annoying and irritating and stressful.

I suspect its a result of people minds altering memories so they are less painful.

I suspect it is the way in which you take vacations. Family vacations where I have 30+ people I'm trying to engage while participating in all the planned events and trying to enjoy the locale, it's just different work than my usual day. However, when I can sit on the beach drinking a good beer, reading a good book, and listening to the waves crash in front of me...it's actually difficult to care about my usual stressors.

NB: I don't know that the latter vacations are available for parents. I am not one, but my many friends claim much the same as you.

Wait, watching hbo shows in the suburbs with $600 healthcare a month isn't as good a memory as traveling around the world?

Another tip: don't marry, don't have children, focus on adventure and sex with relative strangers.

"they don’t like the vacation that much while they’re on it": I wonder if that's more likely to be true in those countries where there isn't anywhere much to go to that's interesting.

"Vacation purchases jump around just the way you’d expect if they were a durable: People spend a lot less on them during recessions, about 15% less in the Great Recession. Food spending, by contrast, only fell 5%."

That is a rather silly comparison. Like any item that is a luxury and not a necessity, people can skip it or do it cheaper. That doesn't make it a durable; that makes it non-essential. The more relevant food comparison would be to restaurant spending, not food spending in general.

This basically describes the entire Disney strategy. Their current slogan is "Let the memories begin."

After my mother had a stroke I moved her from California into my home in Washington state, separating her from her husband (who didn't mind). She wanted to go back to visit him, so I took three days out of my life to fly her down for the visit. I hated it, and she didn't remember the trip at all after we got back. Total loss.

That's exactly the idea behind Total Recall - you buy the *memory* of a vacation rather than having the vacation itself.

By extension, you could just pretend you did something really awesome and achieve even better utility/cost ratios.

At any rate, I've never liked this kind of notion (or vacations) because I think it's better to have present/future utility than fond memories. That is of course a very subjective judgement.

Then I guess the homeless guy down the street who believes he's Napoleon has it pretty good.

Seems like that argument could be extended to education. I generally much prefer having read something to actually reading it.

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