Robert Frank: Jennifer Dulski had been married for six months when she enrolled in my introductory economics course in 1997, which may explain the topic she chose for one of her two economic naturalist papers: “Why,” she asked, “do brides spend thousands of dollars on wedding dresses they’ll never wear again, while grooms, who’ll have many future opportunities to wear a tuxedo, usually end up renting a cheap one?”
Ms. Dulski began with the assumption that women are more likely than men to want to make a fashion statement on big social occasions. It’s a strong assumption. But it’s also a plausible one. I’ve described this example in many different countries, and no one has yet objected. If we grant that assumption, one implication is that a rental company would have to carry a huge stock of distinctive gowns—perhaps forty or fifty in each size, to enable brides to achieve their goal. Because each garment would be rented only infrequently, perhaps just once every four or five years, the company would have to charge its rental customers more than the purchase price of the garment just to cover its costs. But if buying were cheaper than renting, why would anyone rent?
Conditions are markedly different in a rental market for tuxedos. Because grooms are willing to settle for a standard style, a rental company can serve this market with an inventory of only a few tuxedos in each size. So each suit gets rented several times a year, which enables a rental company to cover its costs by charging only a small fraction of the tuxedo’s purchase price.
Robert Frank’s latest book, The Economic Naturalist’s Field Guide: Common Sense Principles for Troubled Times, was published last month. He is guest-blogging for the Business Desk for the next few weeks.