Consumers spend more when buying for a special occasion

Research has also examined if price elasticity differs across products that are more ‘functional’ versus products that are more ‘hedonic’. Examples of functional products are petrol or groceries compared to more ‘hedonic’ categories like sporting events or movies. Findings have been that indeed price elasticity is lower for categories with hedonic qualities. And indeed within grocery, some products are more functional such as paper towels or laundry detergent, and others are a bit more hedonic (consumption gives pleasure) like certain food & drinks. Again, price elasticity analysis finds lower elasticity for products with hedonic qualities. The study cited here examined if the situation for which a product is bought for influences the price paid. While it was for one specific product, pizza, the findings seem consistent with related work. Indeed, our own research on high-priced wine found lower elasticity when the wine was bought for a special occasion.