We live in the girl economy
5min Read
“girl math” and why is it valid.
“It’s basically free.” If you have been on the realms of TikTok, you have definitely heard this quite a lot. The phrase is a pillar behind ‘girl math’ – the concept of exploiting logical processes to minimize the mental costs of expensive purchases. While girls have been employing ‘girl math’ for years, the trend rose significantly over the past 3 months, particularly after the New Zealand radio show “Fletch, Vaughan & Hayley” introduced a new segment with the same name.
In the segment, callers are encouraged to share their guilty spendings with the hosts, who then use the power of girl math to defeat their shameful conscience.
Subsequently, the trend skyrocketed. Netizens eagerly shared their own examples: outlining the pillars of ‘girl math’ and explaining the concept to their fathers and significant others, triggering frustration in some and amusement in others.
(Girl Math list. Credit: @healthbydaniela)
While some accuse ‘girl math’ of misogyny by reinforcing the harmful stereotype that women are inadequate with finances, others view it as a harmless and amusing way to approach purchasing decisions. It gives women confidence to buy what they want without the guilt, making “girly” purchases valid and not redundant. Nonetheless, while ‘girl math’ can offer a sense of psychological relief, it should not lead to financial instability or excessive debt.
It’s essential to clarify that ‘girl math’ is not exclusive to girls; it could be used by anyone. The term is associated with women since it’s primarily brought up by women or purchases that are usually innately feminine, creating the association.
Moving forward, the ‘girl math’ might feel absolutely illogical, however, there are genuine economic explanations underlying those ideas. Here are a few:
Sunk Cost
Sunk cost is an expenditure that has been incurred and can’t be recovered.
A creator on TikTok called Sarah Schultz (aka Econ with Sarah), a PhD student in Economics at the University of Pennsylvania, simplifies various economic concepts in the context of ‘girl math’.
“If I bought tickets beforehand, the trip is basically free.”
According to Sarah, if you bought a ticket for an upcoming trip, the money is a sunk cost. Therefore, going for a pedicure is reasonable, since our purchasing power should not be influenced by the spending made in the past (sunk cost). By emphasizing that the money spent on the tickets is a sunk cost, she highlights the idea that these funds cannot be recovered and should not unduly influence present choices.
(Girl math=embracing sunk cost by Econ with Sarah. Credit: https://vm.tiktok.com/ZMjXK4sRq/)
Prospective cost and Opportunity cost
While sunk cost can’t be recovered, what can be is prospective cost.
Prospective cost is a future cost that can be recovered through strategic action in the present.
Opportunity cost, a base concept of economics, is the value of the next best alternative.
Evie Fox Koob, a senior economist at Deloitte Access Economics, provides the following example:
“Spending $400 on hair extensions for your wedding day.”
What is the opportunity cost? You could have stunning hair and beautiful pictures on your special day, or you could risk ruining your wedding photos and having to retake them. Evie herself admits that the example is an over-exaggeration, but the “decision you make comes not just with a financial cost (i.e., $400) but also with an opportunity cost. In this case, not getting hair extensions has a huge opportunity cost.”
Furthermore, obtaining these extensions leads to saving on a subsequent photoshoot. This potential cost-saving benefit represents a prospective cost.
Consumer surplus
Your willingness to pay is the highest price you are ready to pay for a certain item, and the difference between this price and the actual price is your consumer surplus.
This concept influences our everyday purchases, irrespective of the application of ‘girl math’. But if we want to have an example:
Your favorite clothing store is having a sale. A sweater is priced at $60, yet you are willing to spend $80, regardless of any discount. Your consumer surplus is $20, meaning you’re saving. As girls would say, not buying it would be a loss.
Economies of scale
Economies of scale is an increased cost advantage as output level rises.
In an episode of the radio show “Fletch, Vaughan & Hayley”, this time with invited guest economist Brad Olsen, the following purchase request was analyzed. The team discussed the case of a $330 (NZD) dress intended for a wedding. The show’s hosts used usual ‘girl math’ techniques, such as assessing the cost per wear and potential resale value. What Brad emphasizes is that with each use of the dress (output), we minimize the cost per wear (cost per unit) of the dress. He also highlighted the importance of avoiding diseconomies of scale and reselling the item before it’s excessively worn or out of style, thereby returning some portion of the money from the purchase.
(Episode 3 of “Girl Math.” Credit: https://vm.tiktok.com/ZMjXK9qdd/)
Cash VS Card
“Everything in cash is free.”
This concept is not limited to girls alone but pertains to all purchases; girls have simply coined this playful and whimsical phrase. A study conducted by Christopher Bechler, Szu-chi Huang, and Joshua Morris, titled “Purchase justifiability drives payment choice: consumers pay with card to remember and cash to forget,” revealed the following perspective. Our preferred method of payment depends on purchase justifiability. When a purchase is hard to justify, unnecessary, or induces guilt – such as cigarettes, candy, chips, or other miscellaneous items – we tend to prefer using cash. This preference leads to forgetting the purchase, eventually giving rise to the notion that “cash is free,” as there is no electronic trail of the transaction.
‘Girl math’ is not an obligatory rule one must follow. It’s fun mental gymnastics that lets you make spendings that resonate with you. Through the lens of ‘girl math’, we come to grasp various economic concepts in our everyday decision-making. So, the next time you’re making a “free” purchase, keep in mind that you’re executing one of these principles.
by Aini Yeskhozina
References:
Bechler, C. J., Huang, S., & Morris, J. I. (2023). Purchase justifiability drives payment choice: consumers pay with card to remember and cash to forget. Journal of the Association for Consumer Research, 8(4), 452–464. https://doi.org/10.1086/726429
Gulino, E. (2023, August 16). Is girl math really helping the girls?. Why Girl Math Works: TikTok Trend Explained. https://www.refinery29.com/en-us/girl-math-meaning-trend
Koob, E. F. (2023, September 18). Why girl maths is economics. WEN: Women in Economics network. http://esawen.org.au/440/images/Article22Whygirlmathsiseconomics.pdf
Luna, E. de. (2023, August 16). The resplendent joy of girl math. Mashable. https://mashable.com/article/what-is-girl-math-explained
Wooten, J. (2023, August 21). The economics of “Girl math.” Monday Morning Economist. https://www.mondayeconomist.com/p/girl-math