I’m fascinated by economics and behaviour and especially how economics affects behaviour! For example, did you know that the reason petrol caps on cars are on the driver’s side in some cars and the passenger’s side in other cars is because petrol queues would be longer if petrol caps were always on the driver’s side? This is actually product design influencing behaviour but an example involving economics would be the taxi cabs in Manattan – why are they yellow? Well the reason for this is visibility. Whilst it is possible to call for a cab in that city, the most common way to hire a Manhattan cab is to hail it from the roadside. Therefore the cab needs to be visible. Yellow stands out so the cab drivers are stopped more easily by paying customers who can see them – economics!
It’s also really interesting how different generations behave because of the times they were born into. My parents are in the ‘Baby Boomer’ generation – born just after the war when economically times were hard. This is a very ‘waste not, want not’ generation – ‘make do and mend’ is another of their sayings, and so they have been brought up to be very careful with money. According to information from Swift Money, it should come as no surprise then that the over 54s are the least likely to be in debt. However another statistic shows that this generation is also the most likely to dip into an overdraft for a night out – this is a surprising fact. However it’s worth considering that this doesn’t paint a full picture. Maybe they will dip into an overdraft (or cash they don’t have) but they are asset rich so feel comfortable taking this ‘risk’ knowing they have reserves to bail them out. Don’t forget – the baby boomers are also the generation that saw the boom in the housing market and benefited from the massive rise in property prices.
Millennials on the other hand are less asset rich – it is harder to get together the deposits for home ownership, but they are sensible with their cash and would decline a night out if they didn’t have the money to hand. They are also the generation most likely to take out a short term loan* from a website like this: https://swiftmoney.com/short-term-loans.php
*Source: The Guardian newspaper.
Personally I am of the Generation X category. Savings rates have been painfully low for my generation and we have lived through a couple of recessions. We are also a generation that has earned more than our parents, but in terms of wealth gained we have less by comparison – because of the low savings rates and less return on assets. We entered the workforce during the recession of the 1990s and just when we were finding our feet the dotcom bubble burst! Reading reports online about Generation X and economics makes for sober reading, so let me leave you with one last interesting economic fact to finish on a positive note.
Economics really does influence everything – even fashion. Do you know why men’s shirts button from the right whilst women’s shirts button from the left? This one is down to history. Buttons started to appear on garments in the 17th century and only for the really wealthy. At the time it was custom for men to dress themselves and women to be dressed by a servant, so the (mainly) right handed servants who dressed them would find it easier with buttons this way round. Fast forward to today when we are not dressed by servants, women have already grown accustomed to buttoning from the left and it’d be risky for a manufacturer to offer women’s shirts with right buttoning. Mainly because anyone who noticed would assume she was wearing a man’s shirt! So women wouldn’t buy it – economics!
In case you are interested in this subject too and want to know where my examples came from, I have a great book called ‘The Economic Naturalist‘ by Robert H Frank which is a fun read – if you like this sort of thing!
This post was written in association with Swift Money.