Frugal Fatigue?

by Elaine Schwartz    •    Mar 21, 2010    •    837 Views

Some of us are suffering from frugal fatigue. According to a New York psychologist, symptoms could include anxiety, fear, depression, and even the common cold. The cause is stress from watchful, recessionary budgeting which for certain people is no longer as fun and chic as it was. Statistically, the evidence could be found at J. Crew.  Their fiscal Q4 sales soared 19%–the best gain in 9 quarters. 

The Economic Lesson

Typically, income changes cause demand curves to shift.  Higher income means we demand a larger quantity of a certain good or service;  lower income means the opposite. But not always. Goods that economists call inferior (Spam, cheaper cuts of meat, supermarket house brands) have the opposite impact on the curve. During a recession, we buy additional inferior goods and, as a result, shift their demand curve to the right.

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