Name: How Inflation Raises Our Standards for Having Fun
Uploaded: 2023-11-14T22:38:00Z
Duration: 5 min 41 s
Description: The rising cost of having fun is changing the way some people enjoy experiences and how they calculate whether having a good time is living up to the price. Wall Street Journal personal-finance reporter Joe Pinsker joins host J.R. Whalen to discuss. Illustration: iStock

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The rising cost of having fun is changing the way some people enjoy experiences and how they calculate whether having a good time is living up to the price. Wall Street Journal personal-finance reporter Joe Pinsker joins host J.R. Whalen to discuss. Illustration: iStock

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How Inflation Raises Our Standards for Having Fun

Here's your money briefing for Tuesday, November 14th. I'm JR Whalen for the Wall Street Journal. The rising cost of entertainment and fun has also raised the bar for what people feel counts as a good time. Wall Street Journal personal finance reporter, Joe Pinsker, joins me. So Joe, how does the rise in price of entertainment compare to the prices of other goods and services that have risen over the past few years?

If you look at the data from the Bureau of Labor Statistics, the cost of admissions and fees for entertainment have been rising faster than the cost of many staple goods. This will come as no surprise to people who wanted to see their favorite musician come through on tour, and we're looking at paying hundreds of dollars for some of the least desirable seats in the stadium.

So how does that change the expectations that people have for what they've paid for?

It's making people more attuned to whether the experience they're having is really worth it. When you've sunk a lot of money into something maybe more than you would've wanted to, it might make you more likely to ask yourself how much fun you're really having when you're at that concert or that sports game, or what have you.

What other examples can you give us?

A great example of that would be a woman in Austin, Texas who I spoke with recently, named Issa Jones. She's been going to the same music festival for years. And this year, she paid $375 for a three-day pass to the festival. She remembers paying less than half of that when she attended more than a decade ago. Issa loves live music, but this year at the festival, she just told me that she had this realization that she didn't seem to be getting her money's worth. It didn't feel like $375 worth of fun. I naturally asked her how much fun she actually had, and she estimated that it was more like maybe $200 worth.

She was able to quantify the fun.

Yeah, when things have a really high price, it can get people into this mindset of assessing, am I getting $200 of fun outta this, 300? Where am I?

So why does paying for experiences and entertainment tend to bring people more happiness than buying things?

People might initially think that an experience is not really a great use of money 'cause it's like a one-time thing. Whereas when you buy material good, it might last years or decades. But researchers have looked at the fulfillment that we get out of our purchases,, and experiences have a bunch of advantages. One of the biggest is that experiences tend to come with social benefits. So good social relationships make us happy, and going to a concert or a sports game are often things that we do with others. And that's an in-the-moment benefit, but then there are also these longer term social benefits to experiences as well. They tend to generate memories, and you can talk about them with other people even long after they've ended. It's sort of material for conversations, which are something that definitely contributes to our happiness as well.

Yeah, like a gift that keeps on giving.

Totally, it's not just about what happens in that two hours that you're at the concert venue. There's a lot that happens after as well.

How has the rising cost of experiences affected people's desire to spend?

As I was talking with people from my story and then also, afterward, reading emails that came in from readers once it was published, I saw that a lotta people are taking a close look at some of their spending and subjecting their future purchases to a higher standard. They're saying, "This artist coming through town, do I wanna see them? I'm not sure. It's kinda pricey." At the same time, for instance, in that realm of live music, it looks like demand seems to be staying strong even for very expensive marquee concerts. So many people are still spending.

How does somebody's financial situation factor into this?

There's some research indicating that when people feel like money is tighter, they tend to go on to feel worse about the things that they've spent on. And when the researchers for that study that I was referring to zoomed in on what was going on, they saw that this regret often came from thinking about all the other ways that money could have been used.

But if rising prices of experiences chip away at how much people enjoy them, what can they do to preserve that level of enjoyment?

As prices have climbed for live entertainment and sports games and travel, and all these different types of experiences, the answer isn't just to not do them anymore. Nothing about the research on experiences has changed in that regard. Instead, that very same research actually just supports doing a cheaper version of the thing that you maybe can't afford anymore. One of the interesting findings is that if you look at how much people enjoy a purchase, they do tend to overall enjoy it more the more they spend on it. But that pattern is more true of material goods than it is for experiences. A cheaper experience isn't necessarily going to let you down. An example that one of the researchers I interviewed mentioned was, you might have an amazing time at a fine dining restaurant with their tasting menu that costs a ton of money, but you also might have an amazing time at a cheaper, overlooked restaurant that doesn't invest as much in ambiance. So maybe seeking out the equivalent of that cheaper meal is something that, these days, would help people find fulfilling ways to spend their money in other areas. Right now is a time when it would really pay off for people to look at how much enjoyment they're squeezing out of each dollar that they're devoting and a time when you might not just look at your budget as a way of accounting for the dollars, but a way of accounting for what the dollars lead to.

That's Wall Street Journal personal finance reporter, Joe Pinsker. And that's it for your money briefing. Today's show is produced by Ariana Asparu, with supervising producer Melony Roy. I'm JR Whalen for the Wall Street Journal. We'll be back tomorrow morning. Thanks for listening.

WSJ's Your Money Briefing podcast is your personal-finance and career checklist. Finance reporters and experts break down complicated money questions every weekday to help you make better decisions about managing your money. 

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