Scarcity is a big economic principle surrounding the basic idea of something being in short supply. For our purposes here, however, we’re going to define scarcity as the “opposite of sticker shock.” Our definitions:
Sticker Shock – Something you experience when you see how expensive things are. When you first move to Alaska, you will experience this. Apples are nearly $3/lb?! (not at Costco, though still more expensive than outside Alaska).
Scarcity – When you leave Alaska and realize everything is so cheap, but those prices will only last until you go back to expensive Alaska!
My first trip to Alaska was when I was 12. I came up with my cousin to visit my aunt who lived on a small island in Southeast Alaska. We flew into Juneau and had to take a ferry for several hours from there to get to the island. My cousin and I lived in the suburbs of Oregon and Washington and had no concept of either sticker shock or scarcity in this context. Upon our arrival in Alaska, we were picked up at the airport by my aunt and a teenage boy from her village. We all went out to lunch in Juneau and my cousin and I learned that they had been out shopping. After lunch, we headed to the ferry dock. Along the way, the teenage boy yelled “I have five dollars left! Pull into that gas station!” He jumped out of the car and quickly returned with a box of donuts. Aboard the ferry, enjoying donuts, we asked questions. Why did you buy so much stuff? Why did we stop for the donuts? My aunt told us that money in Juneau went so much farther than money on the island. When they went to “the city,” they tried to spend every dollar they had. That was the most foreign thing we had ever heard. The next day, we headed to the general store to buy groceries and had our first experience with sticker shock. Milk: $8 – and only available every two weeks if you signed up for a gallon before the shipment arrived.
Last month, we traveled to the Midwest where prices are really low. One expense I did not include in the “notable expenses” of our monthly report was a $45 meal that we purchased within the first few hours of our trip. We made it off the airplane and out of the airport and we were hungry, so we went to a restaurant. It was happy hour so everything was cheap! Half price appetizers! $5 kid meals! Instead of getting a reasonable, frugal amount of food, we participated in what I’m now calling “scarcity spending.” We easily drop $45 on food at an inexpensive restaurant up here in Alaska for the five of us. But look how much farther that money can go in the Midwest! So, we ordered everything. 3 full kids meals (no, they didn’t all finish theirs)! 4 appetizers! A pizza to split! Dessert!
As I looked at the receipt as we walked out to the car, I realized we had just pulled into that gas station to buy the box of crappy donuts because they were cheap. While the food at the restaurant was good, we ordered so much of it because it was cheaper than we were used to. Cheap stuff is scarce! Buy it all now! Luckily, I identified it early in the trip and enjoyed the money-saving prices the Midwest offered rather than participating in any more scarcity spending.
Do you experience scarcity spending in any way?
Accountability Friday: Last Friday through yesterday:
F(es)-Yes, M(ex)-Yes, T(Cam)-Yes, W(Ex)-Yes, Th(Cam)-Yes – Back to winning at life!