The economics of Valentine’s Day: sending the right signal

Valentine’s Day planning is upon us. The finest restaurants of Leamington, Kenilworth and Warwick are booking up fast so you should get in quick or else you may be left empty-handed, or even worse, in Coventry. With restaurants taking advantage of this romance-fuelled day by charging double for their food, the question on many people’s minds is why should we so effortlessly give in to this social pressure? Can you not take your significant other out on 13 February, or 15 February? To answer this, let’s take a look at the economics.

Fewer questions reveal why economics is known as the dismal science, as much as ‘what is the best gift to give?’ The answer being the horrendously impersonal ‘cash.’ The basis for this being that everyone gets that disgusting sweater, the music they will never listen to, or yet another pair of useless novelty socks.Economics says cut all the crap, and just give cash; this way everyone can buy what they want. Try that on Valentine’s Day if you dare. A gift of cash would only ever be useful if you are trying desperately to get rid of someone and even then there are much better ways of doing so; you could say you find unilad.com hilarious.

This all suggests that gift giving plays some other role. This can be explained through signalling theory, which looks at how we communicate information to one another. This emerges due to asymmetric information (just a fancy term for knowing something that the other person doesn’t) and to let the other person know how you feel, you need to send an appropriate signal. Looking at gift giving in this way paints a very different picture. If you want to take the guy or girl of your dreams out on Valentines Day, you need to express how much you like them. To do this you need to send a good signal, but how?

Booking a table for two at the best restaurant in the area (undoubtedly Tailors in Warwick for those of you unsure), with transport and a romantic night in a five star hotel is certainly one way to send that signal; however, your bank balance will take a huge hit. Fortunately for the poor student and that precarious bank balance, there are other ways of sending this strong signal of affection.

The essential part of sending a good signal is cost, but this doesn’t just mean money, it can mean time as well. Spending hours hand making a beautiful card with a thoughtful, well crafted message will certainly send out a positive signal. As would preparing a three-course meal, cleaning the house, getting rid of your flat-mates for the night and having a romantic dinner in.

There is another factor we need to consider, namely the strength of the relationship. So far we have assumed that a strong signal of affection is required but this isn’t always necessary. For those of you in long-term relationships already, offence may not be taken if you decide to celebrate on another day to save money, provided this is arranged beforehand. With the average amount of money spent on Valentine’s day being over £80, you could even spread this money out over a number of cheaper surprise dates over the course of the year.

So for those of you lucky enough to be dining for two this Valentine’s Day, bear this in mind. Fortunately for the cash-strapped student, what matters is not the money you spend, but the thought and love behind the gift. That will truly make your Valentine happy.