Is diamond a woman's best friend?

Wedding season is almost over. As an economist, I have a weird habit of breaking down cost of almost anything. Especially weddings. To me, wedding services are overpriced. A friend of mine has hired a wedding planner for $3000 (?!). To put the number in context, it is 10-month salary of an average Vietnamese. Other auxiliary services such as floral arrangement, venue booking, etc. might double given the wedding tag.

Why wedding is so expensive?

Vox tried to explained the staggering price by the two concepts: asymmetric information and "once in the life time" mentality. In customers side, the grooms and brides do not have a clue on the production cost of everything related to wedding: from the dress to the flowers. Wedding vendors, on the other hand, share little-to-nothing on production cost in the internet. If you google "wedding cost", there is a slim chance you find the service price and break-down costs in details. All you find is an endless creativity board of "perfect weddings". There are some budgets which were shared for good wedding jokes.

Source: Vietnamese couple shared his budget online in the internet here

To overcome asymmetric information, vendors can signal their quality through price. High price means top-notch quality. A dress from Calla Bridal, one of the Vietnamese top wedding tailor, is at least 100 mil VND (?!). A top-notch wedding planner can cost 75 mil VND (?!!)

This is when the second reason comes along. Wedding is not just another party. It is a life-time event. Couples want to utilize this event to signal two things: i) their love for each other; and ii) their social status. As per love, diamond giant De Beers had excellent ad campaigns to persuade man and woman that diamond resembles infinity love. Spending 2-month salary on a diamond ring can secure such love.

Source: Goodhouse keeping

As per social status, families would rather lose money than "lose face". This is another case of conspicuous consumption. Adam Ruins Everything explained the wedding tag through this perspective.

Yeah... I know wedding is expensive but I have my diamond ring, duh?

I will base this section on the 2015 study of Francis-Tan and Mialon. According to the authors, the wedding industry grows thanks to bridal magazines. Bride's, especially, promoted the necessity of a lavish wedding. During the period of 1959 - 1990s, wedding checklist has grown from 22 to 44 tasks for couples to complete.

Francis-Tan and Mialon found out "spending between $2,000 and $4,000 on an engagement ring is significantly associated with an increase in the hazard of divorce among the sample of men". To be specific, spending between "$2,000 and $4,000 on an engagement ring is associated with a 1.3 times greater hazard of divorce as compared with spending between $500 and $2,000".

With regards to wedding, "spending $1,000 or less on the wedding is significantly associated with a decrease in the hazard of divorce in the sample of all persons, and spending $20,000 or more on the wedding is associated with an increase in the hazard of divorce in the sample of women... Spending $20,000 or more is associated with 1.6 times the hazard of divorce in the sample of women".

This occurrence can be explained by financial distress a.k.a the wedding aftermath. Study shows spending "between $2,000 and $4,000 on the engagement ring is associated with two to three times the odds of reporting that debt". By constrast, "spending less than $1,000 on the wedding is associated with an 82% – 93% decrease in the odds of reporting wedding-related debt stress compared with spending between $5,000 and $10,000".

Turn out, neither expensive weddings nor diamond rings can secure an eternal love. It leads to eternal financial distress. The tales of fairy wedding are fabricated by the wedding industry. It is time for us to think twice and stop being FOMO.

I hope this post save you some money and love.

Until next time!

Reference:

1. Tan, A. & Mialon, H. (2020) “A DIAMOND IS FOREVER” AND OTHER FAIRY TALES: THE RELATIONSHIP BETWEEN WEDDING EXPENSES AND MARRIAGE DURATION", https://doi.org/10.1111/ecin.12206

2. Cameron, M. (2014), Why are weddings so expensive?, https://sex-drugs-economics.blogspot.com/2014/03/why-are-weddings-so-expensive.html

Poets, Politics, (and Economics)

There was the Joe Biden's inauguration as the new USA president this week. Amanda Gorman won her spotlight with her poem: The hill we climb. I listened to it thousand times. Yes! Poetry is what the world needs right now.

"When day comes, we step out of the shade, aflame and unafraid.

The new dawn blooms as we free it.

For there is always light,

if only we’re brave enough to see it.

If only we’re brave enough to be it"

Amanda Gorman reminds me the power of poetry. Joe Biden was the fourth presidents who had poets in inaugural ceremony after John F. Kennedy (1961), Bill Clinton (1993, 1997) and Barack Obama (2009, 2013). After listening to them all, "On the Pulse of Morning" is my favorite.

In Vietnam, poetry was also used to unite the nation. Vietnamese people learnt by heart Lý Thường Kiệt's Nam quốc sơn hà (Mountains and Rivers of the Southern Country) as the symbol of indepence from the North:

Nam quốc sơn hà nam đế cư

Tiệt nhiên định phận tại thiên thư Như hà nghịch lỗ lai xâm phạm Nhữ đẳng hành khan thủ bại hư

"Translated: The mountains and rivers that carved the southern empire, dwelled by the Southern Emperor.

Its sovereignty is of nature's will and is allotted in script from the heaven. What gives these invaders the right to trespass it, They shall, in doing that, see themselves be defeated and shamed"

In this digital age, one could question the need of poetry. To me, there is no computer program can beat a rightful poem in rhetoric. Amanda Gorman has done a fantastic job confirming the role of poetry in chaotic times.

Maybe a poem won't literally pass legislation or deflect a bullet from exploding in my Black body, but a poem is what makes our hearts move. It does make people think, reflect, and it can even lead to empathy. We need that. That quality of light where hopes and dreams can live is what this country needs, and you can count on the artists to keep fueling all of our movements for liberation (Ashley M. Jones)

As an aspiring teacher, I also curious with the use of poetry in (economics) teaching. Poetry is known as a mnemonic device in Math lessons. I still remember the poem on trapezoid at high-school:

Muốn tính diện tích hình thang

Đáy lớn, đáy nhỏ ta mang cộng vào

Rồi đem nhân với đường cao

Chia đôi kết quả thế nào cũng ra

(Translated: If you want to calculate the area of a trapezoid

We bring larger base plus smaller base

Then multiply it by the heigh

Divide by two we've got the results)

Mary Davis in Tufts University had an experiment that assigned graduate students to write proses for economics class. Here is one poem on diminishing rate of return by Betsy Byrum

On weekend mornings and without delay

I make some coffee to jump-start my day

The first cup’s delicious – fragrant and hot

It helps wake me up and def hits the spot

I have a second, it quenches my thirst

But’s not as satisfying as the first I drink a third cuz it’s there in the pot It’s good but makes my stomach hurt a lot

The quantitative impact of poetry on student scores is not available yet. Students, however, reports spending longer for economics assignment. Long-term retention and overall student experience are the two positive outcomes of this experiment. To first year students in Vietnam university, I don't think poetry is a suitable learning/teaching tool yet. This approach may work well in liberal arts system. We shall wait and see whether Fulbright University adopts creative poetry in economics. Till now, let us appreciate the beauty and power of words and poetry with Maya Angelou

Reference:

1. The Week (2021), From Kennedy to Biden: The tradition of the inaugural poet, https://www.theweek.in/leisure/society/2021/01/20/from-kennedy-to-biden-the-tradition-of-the-inaugural-poet.html

2. Jones, A. (2021), Amanda Gorman reminded America what poetry can do, https://edition.cnn.com/2021/01/22/opinions/amanda-gorman-affirmed-poetry-and-me-ashley-m-jones/index.html

3. Davis, M. (2019), The Poetry of Economics, https://sites.tufts.edu/marydavis/files/2017/01/Poetry_Final_Draft_8_12.pdf

4. Davis, M. (2019), Poetry and economics: Creativity, engagement and learning in the economics classroom, International Review of Economics Education.

5. Davis, M. (2015), Bringing imagination back to the classroom: A model for creative arts in economics, International Review of Economics Education.

|Stumbling with words| Recommendation N.05

Hello again!

I'm back with another set of recommendations. In the past weeks, I discovered some interesting Vietnamese podcasts and readings that I'm delighted to share with you.

1. Podcasts

Vietnamese podcast starts to gain its popularity. In the previous posts, I already mentioned Oddly Normal and Unlock FM as two of my new found love. Here are two more lovable background noise for your morning walks.

• Bốn chấm không: This podcast brought to you by two Yale alumni who work in Silicon Valley. My personal favorite was Episode No. 1 where Lien, the guest, share her stories in the 4.0 era. One big lesson I took away was the urgency to learn dealing with data. I was so motivated that I registered Udemy courses. In the next posts, I will update you with my learning progress :)

• Chuyện Khởi nghiệp This is a nice discovery reminding me of my start-up days. My personal favorite was on Son Dao and his mistakes with the very first transformation gym in Hanoi - Swequity gym. After all, we should answer Why before working on How.

2. Movie

I finished a rigorous movie marathon on teachings last week and share my thoughts here. Other than that, I would like to share a documentary with you.

3. Readings

- Con nhà giầu và con nhà nghèo khác nhau ở điểm nào? Phân tích từ góc độ giáo dục: is a brief writing on how students from richer background earn their privileges in life. I like the first part of the writings where the author explained why. The second part, however, is not convincing since it derived from subjective opinions of the author. Nevertheless, it is the good read for students to understand the (limited) attribution of education to one's success. - Kinh tế học vô hại is a great translated version of Harmless Economics in Github on casual inference. After the data class from Udemy, i will continue my conquest of knowledge with this website. Have a look if you fancy to learn new research techniques in economics.

And finally, I played this song thousand times this week. Hope you like it too!