Learn With Elaine: Impulse Buying

Impulse buying reflects the extras that we purchase when thinking at the margin.

Econlife Blog

How the Pandemic Changed Our Impulse Buying

Fact Questions:

1. On the checkout line at the supermarket, what impulse buying do we do?
2. Referring to the first graph in the econlife post, state how many more of us are buying groceries online now than before the pandemic?
3. Referring to the second graph in the econlife post, compare the change in sales of gum and mints between 2018, 2019, and 2020.
4. Describe the new kind of impulse buying that Hershey is trying to encourage.

The Economic Idea: At the Margin

Rather than doing all or nothing, most decisions involve something smaller. Typically, we are considering how much extra to do. The margin is where we make our decisions about something extra.

At the margin, we might hit snooze on an alarm and sleep an extra 15 minutes. During dessert, the decision to eat another cookie is at the margin. Similarly, when a student studies an extra hour, that decision was made at the margin—at the imaginary place where we had to decide how much extra we are gong to do.

Impulse buying also takes place at the margin when we decide to buy something we do not need.

Activity Goal: To consider the decisions we make everyday at the margin

 Procedure: A pass around exercise.

1. On a small piece of paper, name a place where you or your classmates go during the school week or weekend.
2. Pass the paper to a person on your right.
3. The recipient of the paper should note a decision made at the margin at that place.
4. Then, again, pass the paper to someone else. On the same paper, note an alternative that was not selected when you made your decision.
5. As a class, share these examples of decisions at the margin. Using ideas that relate to cost (defined economically as what was sacrificed) and benefit, explain why you and your classmates make those decisions.
6. Use cost benefit analysis to explain why we make impulse buying decisions.