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The Economics of Valentine’s Day

This article is written by a student writer from the Her Campus at CMU chapter.

Couples are planning to go all-out for their loved ones this Valentine’s Day, spending WAY more than in years past.  In 2016, Valentine’s Day is estimated to contribute $19.7 billion to the economy, according to the National Retail Federation. Two years ago, only $17.3 billion was spent.

Just like last year, more than half of Americans will celebrate Valentine’s Day in 2016.  The record was set in 2013, with 60% of consumers celebrating. That means fewer people are actually participating, but each person is spending way more.

So who spends the most?  As it turns out, young, wealthy men dish out the most cash on Valentine’s Day.  Those who are celebrating are spending an average of $146.84 each.  As usual, men spend nearly twice as much as women: $196.39 per guy compared to $99.87 per girl.

Younger people (who are still trying to impress each other) will participate more than older, more settled folks.  Nearly two-thirds of people between the age of 25 and 34 will celebrate the holiday, and 60% of people between 18-24 years old. Less than half of people between 55-64 years old will celebrate, and only 44.7% of those 65 and older.

What are the top five Valentine’s Day purchases?  As you might expect, the most popular purchase is candy, with 50% of shoppers dishing out cash on this fattening (and much cheaper) gift.  Greeting cards come in second at 48%, followed by an evening out at 38% and flowers at 36%. While only 20% of Americans decide to purchase some form of jewelry on Valentine’s Day, we still spend the most (approximately $166 per person) on this pricey gift.

Where do Americans shop for Valentine’s Day gifts?  For the first time in years, more consumers will go to department stores (35%) than discount stores (31%).  Nearly 20% will go to greeting card stores or florists, while only 11% will go to jewelers.  Retailers have stocked the shelves with deals in anticipation of value-conscious shoppers.  As on the Black Friday holiday weekend, more and more shoppers simply go online each year.  In 2016, nearly 28% will, compared to 25% in 2015 and 16% in 2014. 

Finally, it’s important to mention that the use of mobile devices is still on the rise.  Just like on Cyber Monday, shoppers use their mobile devices to share the love on-the-go.  Nearly half of smartphone or tablet owners will use them to research prices, redeem coupons, and purchase products.  Teenagers and college students will also employ Facebook to share the love through social media.

I am currently senior majoring in Business Administration and Statistics with a track in Finance at Carnegie Mellon University. Jane Austen, Charles Dickens, Enid Blyton and J.K Rowling are a few of my favorite authors. I also love watching British TV shows (Sherlock is my favorite!). On campus, I am involved in several activities, including Carnegie Mellon Business Association and Smart Woman Securities.