Janus Thinking

It’s not fit. It’s feelings.

says a recent article in Forbes on the continuing appeal of very exclusive items with very expensive price tags.

Perceived high quality, a similar (but higher) price compared to the nearest luxury competitor, a desire to impress peers and create the reputation that comes with ownership of certain luxury goods—these things combine to create greater demand for objects not everyone can access.

This is particularly true when items are given as gifts, according to Professor Jagmohan Raju of the Wharton School at the University of Pennsylvania:

If an item is given as a present, then the price is a demonstration of affection and consumers will often justify a higher price.

I have difficulties equating price paid with level of affection for the recipient. Of course spending more money on a gift will buy you “nicer” things, but the value of the gift in emotional terms will depend on how the recipient interprets it. The price of the gift could be $1.80 or $1.8 million—what matters is whether it will mean something to the recipient and whether he or she will truly appreciate it.