The Economics of Expensive Clothing

by Izaak

Before I begin, I’d like to note that I am not an economist, and so I might be completely wrong. But I think I’m probably at least a little bit right.

I’m talking about society in this post, which involves talking about gender roles. I hope that everyone recognizes that I am making broad generalizations across genders, and ignoring nonbinary genders, because that’s how society views gender.

Also, despite being genderfluid, I’m also approaching this post from my male perspective—I was assigned male at birth, and its still the gender I most commonly present as.

I.

I’m a college student in a choir, so I recently had to purchase a tuxedo for our performances. I also went to prom twice during high school, and rented a tux both times. Both times I rented a tux, and when I bought one, different questions were brought up among my peers. In the case of high school, the question was why guys rent tuxes whereas women buy dresses? And the answer to that is that tuxedos are much more expensive than dresses, at least when they’re both at the same quality level. But when we bought tuxes this year, someone asked me a question that I had never thought of before. Why are tuxes so expensive?

For some context, the tuxedo I bought—coat, pants, shirt, cummerbund, bow tie, cuff links, studs, and a pair of black shoes—cost something in the neighborhood of $1,000. That’s probably the price of the tuxes I rented in high school too, but those I rented I got for around $200 for a weekend. I’ve asked around, and consulted my own memory, and the average price for one of the dresses my female friends bought and wore was between $100 and $200. That means for clothing alone, prom cost about twice as much for me as for one of my dates, even though she bought the dress and I rented my tux.

So why are tuxedos so expensive? The first thought that came into my mind was that tuxedos cost money to make, and because they cost more than dresses, they must cost proportionally more to make. But… Why is this the case?

II.

Have you ever shopped for a tux? You go to a store, and they usually have one tux that they’ll recommend for you. It’s a standard tuxedo thats the right size for you and the right shape for your body type. Maybe there will be more choices, but it’s absolutely unlike dress shopping. Have you ever shopped for a dress? It’s a totally different experience. You show up at the store and they’ll have hundreds of dresses that are all different, and it takes time. You have to find the small intersection of dresses you like with dresses you fit into. So it’s certainly more expensive to hire all the different designers, and have a hundred different designs the seamsters have to work with.

For a while, I thought it could be the quality of the fabric. But it’s not, I’ve compared them. They tend to be fairly similar, and when they’re different, a tux has fairly standard fabric, while a dress has fancy laces, gauzes, glitter, or such.

There’s one argument that does hold some sway. Suits do tend to have a lot more fabric than a dress, to be certain. That does pump up the cost of creation slightly. But I’m not sure it can account for the tenfold increase in price—it certainly doesn’t have ten times as much fabric as a dress.

Tuxes probably do cost more money to manufacture than most dresses. But the point I’m trying to get across is that they can’t cost that much more.

III.

The reason I wrote this blog post tonight is because I finally realized, after wondering about this for the past week, why tuxes are so expensive. The reason is tied up in the ways men and women treat their expensive clothing. One of my colleagues in choir mentioned that he spent a lot of money on his tux—$1000 is a lot to drop all at once on a piece of clothing, especially for a college student. But he justified it by saying, “I know it’s a lot of money, but I’ll get a lot of uses out of it. I’m sure I’ll need a Tux at some point in the next couple years for something other than choir, and I would probably end up spending more renting it each time I needed it than I will this way. After all, It’ll probably last me a while, unless I get fat.”

If I had bought a tux in my junior year, I would have worn it again my senior year. I wore a button up shirt, tie, dress pants, and a sports coat to all the other dances, probably switching out the button up shirt each time, but keeping the tie, pants, and the sports coat the same. And I like fancy clothing—I own more than the average person.

Almost every single woman I know wore a different dress to every dance.

There’s a social stigma against wearing the same dress twice, for whatever reason. One of the women I know wore the same dress to prom both years, and she wasn’t shunned or anything for it—she was actually congratulated for being so frugal for doing something every guy was doing anyway—but it was indeed outside of the norm. Some people will claim that the reason women are encouraged to do this is so that the capitalist patriarchy is trying to suck money out of women’s pockets. I think that’s true, but in this case I think the capitalist part is much more relevant than the patriarchy.

Capitalism knows that women want a new dress every single dance. Capitalism also knows that men will wear the same tux to every event for 20 years if they can.

And prices are adjusted accordingly. If a person has $1,000 to spend every ten years on fancy clothing, women will need to buy a dress every year, and so merchandisers are forced to price their dresses at an amount where women can afford to buy them over and over again. They could likely price tuxedos at the same price, but they can make more money by forcing men to pay their entire budget for ten years at once.

There’s a complicated mathematical relationship between the price of an item and how much is sold, and what the total profit is for the company. This is called profit maximization. If there’s no markup, the company will make no money despite how much they sell. If there’s a huge markup, the company will make no money because no one will buy it. And somewhere in between there is a maximum total profit, some function Profit(price), where most people will buy it, but the company still makes a bit of money from each sale.

For example, a random guess at the profit vs price graph for dresses is below. Dresses need to be bought relatively often, and so once they cross a certain price threshold, the number of people willing to buy the dresses drops incredibly quickly.

profit

 

(Please note that while the horizontal scale is the same for all three lines, the vertical scales aren’t the same, even for the two that could be expressed in terms of dollars.)

For tuxedos, however, the amount of people willing to buy them remains pretty constant regardless of price. I had to buy one, so I did, and I won’t buy another one until this one is literally in pieces (unless I get really rich). And the price at which most people would like to buy them is less than the price to manufacture, so there’s no early peak, but the amount of customers stays fairly constant as price goes up, so there’s a later peak.

profit2

IV.

It fascinates me, how the prices of these two items, which have the same purpose, can cost so differently for reasons other than manufacture cost. What really makes it interesting, to me, is that these functions are not different for the reasons that a Ferrari costs more than a skateboard. It has nothing to do with the prices needed to pay for the fabrics and dyes, to pay the seamsters and cashiers, and to rent space and transport merchandise. It has absolutely everything to do with the buying habits of the customers.

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