Have you purchased a new cellphone, an LED TV, a vehicle or plan to do so in the festive marketing season? Are you planning to get a new décor for your home or office set up before Diwali? Are you thinking of purchasing some gold metal on Dhanteras and ensure that Goddess Lakshmi blesses you with good fortune? Do you pick up each day’s newspaper and at least browse the first few whole page Diwali spree advertisements? Are you one of the Millenials, who pick up their smartphones and instead of browsing through their office documents et al end up on one or the other online shopping platforms? If answers to these are “yes”, you are a normal customer of the Diwali mania who is proudly part of the paradoxical world of DIWALINOMICS.
After all typical preparation for Diwali celebration in an Indian house starts almost a month before the day. Most of the households indulge in splashes of wall colours to give their old house a new vibe of positivity followed by detailed purchase of white goods from markets. Women folk leave no stone unturned to prepare kilos of sweets often forgetting the New Year promise made to themselves, to hit the gym and to cut down the calories.
The house witnesses new set of furniture and interiors, while its residents purchase anything that they can put their hand on in the market. All this is obviously preceded and triggered by the page full of advertisements with tag lines such as “Diwali Bonanza” or “Rush and Enjoy Diwali discounts”. These marketing gimmicks play beautifully by encapturing the mind of prospective buyers.
The advertorial information thus floods the mind of a Diwali buyer and empowers him/her to indulge in shopping spree.
It seems everyone in every household is in a competition to welcome Goddess Lakshmi and to attract her to their house.This is one festival when “non-theories” of Economics is in full bloom. It is that time of the year when the basic premises of Economics that of rationality and perfect decision making goes for a toss. The irrationality of typical Indian consumer is a spectacle to be observed during this festive season.
The basic tenet of difference between the definition of “need” Vs “desire” is in full spot when all and sundry are desperate to purchase anything and everything just to satisfy their desire. Splurging on long lists of white goods or furniture or vehicles or clothes or household goods is a new normal for these days.
No longer the basic principle of change in Demand and Supply with respect to price, influence the sale and purchase of these goods. This is a time when Behavioural Economics is in full play. A typical shopkeeper can be seen tweaking changes and nudging choices just to ensure maximum sales. Diwali is indeed a typical National shopping festival of India when Indians embrace consumerism with all their heart akin to the shopping spree of Western world during Christmas time.
This is the time when it appears that the basic consumer of traditional theory of consumption forgets and moves way beyond the scope of consumer equilibrium. Budget planning goes for a toss and indifference curve doesn’t make sense. It is as if, the consumption graph is continuously increasing and the point of satiety is never to be achieved. It is really interesting to be a part of the paradoxical world of the yellow metal in India during the Diwali shopping season.
Buying gold on Dhanteras (celebrated a day or two before Diwali) has been a part of the Indian tradition since ages. It is exciting to witness not only the women folk but also their male counterpart’s haggling and crowding the innumerable gold shops. The gold metal “utility” as strictly defined in economics parlance as wants satisfying power is in full play. Observing a lady selecting a gold necklace, a ring and an earpiece helps one to witness the “Revealed preferences” as exhibited by a typical consumer of gold.
It appears as if each is in competition to bring more luck for themselves and for their family by purchasing more and more of gold metal. India anyways has had an economic history of hoarding of gold and consequent low capital formation in the 18th and the 19th Century.
The Gold market economics in play during Dhanteras and Diwali is after all the influence of culture and traditions on the consumer behaviour. In fact, all human behaviour including market behaviour takes place within a cultural context (Haris and Moran 1987). The gold metal thus during these days no longer remain merely a commodity but rather becomes a piece of tradition to be treasured for lifetime.
The writer is an IAS Officer of Madhya Pradesh cadre, who originally hails from Ranchi and the views expressed in the article are her own.