When Less is More: The Importance of Perceived Value

I enjoy theatrical performances more than most people. I really do. But I don’t think I would pay $200 to see ANY performance.

I can usually get good seats at my local opera house for much less than $100, but better still, my community arts center offers often high-quality shows for about $15 a pop.

It’s important to support the arts, but it’s not necessary to pay an arm and a leg to catch a good performance.

May I suggest a possible third way in this scenario that has the potential of getting you the best of both worlds?

A night at the opera doesn’t have to cost $200 (unless you purchase Orchestra seats and Renee Flemming is in town). You *could* choose to skip the fancy dinner and make the opera itself the event. You could also go to other (less pricey) professional theatrical shows (where you live has TONS of excellent theatre).

I’m not eschewing the community or high schools shows. By all means, go see them if you derive enjoyment from that. But is it not a *necessity* to over-spend to go see professional theatre.

When I go to the movies, I NEVER purchase anything at the concession stand. That’s not why I go there. I’m there for the movie. And the movie is my “fun” money spending. By not purchasing a soda and popcorn, I can go see more movies (which is what I really enjoy), rather than feel bloated by the over-sized popcorn and soda.

I know that’s not the way it is for everyone, and there’s nothing wrong with that. This is just a thought on a Third Way.

One thing that’s important to me in spending decisions is making choices that support the world being the way I want it to be–for instance, I buy my food locally because an economy where all food is trucked or shipped or flown in from long distances away scares me. Supporting local theater is more important to me than supporting flown-in opera productions, and they’re both more important to me than supporting Hollywood.

Maybe I’m a snob, but I couldn’t even compare the opera with a high school play. Not that I wouldn’t find the high school play enjoyable, but a good opera performance can move me to tears. I also used to sing in competitions, and my college roommate studied vocal performance and opera, not to mention I took some opera studies courses “for fun,” so with all that, I’m sure I’m biased.

Two weeks ago, I saw Andrea Bocelli sing the part of Turiddu in Cavalleria Rusticana. You know how people have life lists of things they want to experience before they die? I checked one off the list that night.

It’s not that I haven’t enjoyed high school plays in the past. It’s just that I don’t like them enough to buy a ticket, however cheap, and get off the couch and go spend a couple hours there. I’d rather stay at home with Netflix. But, I don’t go to the opera that often, only for performances that I really want to see, and we don’t do expensive dinners beforehand.

I also think that if people learn about what was happening around the time the opera was written, it’s much more enjoyable. I think the context is important, as with any piece of art, but that’s just my two cents.

I’m in the middle of reading a book right now called, “Deluxe” by Dana Thomas, and this is all I can think – how perceived value is such an illusion!

I totally agree with EscapeVelocity. In addition to high school and community productions, our city’s university has a great drama department, and a lot of the local churches have concerts this time of year.

And going local also applies to sports. We Canadians love our hockey, but going to junior level or provincial league games is far less expensive than NHL games — and the community spirit can’t be beat! (Toronto’s farm league the Marlies have a better record that the Leafs!)

I agree that community events can bring much more joy and value than a large event with a stadium full of people. I loved watching minor league baseball when I lived close to two major league baseball clubs. There was a lot more interaction with people and the hot dogs were much cheaper too!

How one spends one’s money reflects one’s values. Money is a tool and should be used to enrich your life whether it be wine, theatre tickets, electonic gadgets or a rockin’ pair of shoes!

I totally agree! For the past three years, our annual Christmas date has been the local high school’s madrigal Christmas dinner/show. $15/person for dinner and a very entertaining show. We like live music, but we don’t have discerning enough ears to appreciate the professional performance that much more than the reasonably good amateur. If we did, the value attached to the professional performance might be much higher for us.

I’m kind of distraught that you’d equate community theater with ‘cheesy’. My local community/civic theater is often better than anything the professionals put on. Each of these actors works hard in their spare time to put on these productions. We have Doctors, teachers, businessmen and women.

I would also add that in order to live a frugal lifestyle you have to evaluate what emotional value is added by the price you pay. What I mean by this is some people enjoy something BECAUSE of how much they paid for it. Others put more value because of the deal they got. Some people like the opera because $200 for an evening means it’s exclusive and they like that feeling. It also means they had to have $200 to spend on an evening and it makes them feel like they have more money than they do. NEITHER HAS ANYTHING TO DO WITH THE ACTUAL EVENTS OF THE EVENING OR INTRINSIC VALUE THEREIN. But the price adds to the emotional value and therefore the value to you.

Living a frugal life means changing your mindset so you get more emotional payoff from getting more intrinsic value for less money.

Keep an eye on colleges if you want to see professional performers at bargain basement prices.

This year, I was lucky enough to see two world-class bassists in one evening, for five dollars at ASU. Back when I was in college, I got to see Don Giovanni performed by students and faculty ($5), and a national jazz singer ($3!) who blew my mind.

Great post! I’ve been thinking about perceived value a lot lately, especially around the gift giving holidays. We live in a world where the value of the gift sometimes depends on the price the gifter paid. For example: If I gave a gift worth $60 and only actual paid $30 (because I got it for a steal), does that lessen the value of my gift? Maybe not, if the recipient doesn’t know the actual price I paid, but what if that person did. There are members in my family who tend to think that you must spend a certain amount per individual regardless of the price savings you might have gained. I on the other hand think the perceived value of that gift is what truly matters.

Following Pastabagel@8′s comment on determining value through price discovery:

Sometimes people do benchmark the value of a good by its market price and then, when this good goes on a mega-sale (like now, when merchants are attempting to woo reluctant spenders with deep discounts this christmas season), they sort of forget that getting a $3,000 TV for $600 is only a “steal” if their personal value for the TV exceeds $600. Price discovery can help you get a better sense of a reasonable market price, but ultimately, it’s the personal value you place on the item that matters.

I’m not sure how far we can take a value investing analogy into shopping for consumption goods, simply because it’s unclear to me how we would define and measure the “fundamentals” of a TV. There’s no PE ratio, etc., to examine.

Perhaps the analogy would work better if we could buy and sell items the way we do stocks. But it seems that unlike stocks, where buyers don’t really care that someone else has “owned” the stock before them, most consumer goods lose market value once they’ve been “used” – where “used” can mean brand-new in the box. The only objective value of these kinds of goods I can think of is resale value (discounted for your time/effort costs of actually selling it). If you can buy a TV for $300 and resell it to someone else for $600 net of your time costs, maybe that is legitimately a steal.

Of course, talking about buying a house complicates matters, since people will simultaneously view this purchase as an investment and a consumption good, with all the craziness that ensues.

I’m not trying to imply that Pastabagel is wrong, but merely pointing out that even something that looks as objective as price discovery may not be enough to keep a thoughtful, frugal person from making a poor purchase decision based on some illusory ideal of “true value” rather than personal value.

@Lucky–Very true. I saw opera performances put on by my university, and they were all very good and very inexpensive…sometimes free. I know the students were happy to have an audience, too, since my roomie was often one of the performers.

There are inexpensive ways to enjoy operas, if you’re actually into the music and performances, that is, and it’s not all about expensive dinners and premium tickets.

(a pop SINGER)

My husband LOVES the Charles Shaw “extreme value” wine at Trader Joe’s, which I think costs $3 a bottle here ($1.99 in Cali – “Two Buck Chuck”) – I feel like just making the bottle ought to cost more than this, I wonder how they make a profit?? He now refuses to drink anything else, because every time he does, he keeps saying “this may be good, but I know a good wine that only costs $3!!”

The only comment on this in the previous post was to say ‘don’t buy it because if it only costs $2, it must not be made of high quality ingredients’… well, we are only concerned with the quality of the taste and the price. As you point out, perception is everything, all the branding and advertising in the world don’t matter if you love the product.

I like J.D.’s post and what I came away with is that people put different values on different experiences/goods/services. Someone might value really good wine so that $80 bottle is a real treat and they are willing to spend the money. Someone might value really good food so they spend more on fancy eating experiences at home and out and about.

For me, I value travel and art. When we travel we stay at either very high end accomodations or very different/unique accomodations, both of which tend to be pricey. We just returned from a Thanksgiving weekend trip and we stayed in a unique historic Inn right on the beach and I paid the extra to have the biggest room with the large deck overlooking the water. Some might say, yikes why would you pay so much for a room, you’re just sleeping there, but for me (not so much for Mr. Sam) I value that extra special room with the view. Same thing with art, although this is one that is an issue for Mr. Sam and since we have a $300 agreement (anything over $300 has to be discussed an agreed), I made a choice some time ago to only buy original art. And while I certainly can buy some lovely original art that is reasonably priced, my art purchases tend to be on the pricey side. A few years back I bought a beautiful, original painting and paid for it in installments ($X a month until it was paid off). I value art and I willing to pay for it.

Good post. I try to spend money that has a higher perceived value for me with my health. For example I will spend money on the gym, vitamins, sport teams, because my activity level and health are important to me. I have a higher perceived value for all of those than what they actually cost because exercise is very important to me. I hate spending money on nightlife and wasting it on expensive drinks. sure I’m having a good night with friends, but I don’t get the same value out of it. That’s my thing, what are other people’s?

I have been sitting here navel gazing and asking myself “What WILL I pay more for just because of personal value?”

Most everything that comes to mind doesn’t fit the criteria. I am willing to pay more for intrinsic value. Either quality (ex: we buy nice power tools to last) or performance (ex: We have a nice computer for DH to run simulators for school).

I feel so lame! I don’t drink. We don’t go out. I wear jeans to work (and don’t care about clothes). I’ll sometimes go out and get a really nice steak, but only when I’m travelling and work is picking up the tab.

HOWEVER, I find myself paying a bit more for name brand groceries. Not the ones that are the same (like ketchup), but I will not buy generic cereal, cheese (at least not to be eaten raw or as main flavor), peanut butter, soda, etc. In fact I find myself paying quite a bit extra for imported Coke that is made with sugar instead of corn syrup. I restrict myself to one or two per week but they give me personal satisfaction disproportionate to the price difference.

I’ve been thinking about this all day, and come up with the following:

I love backpacking, I’ve lived out of my pack in more cities than I can count, and even now as a professional when I travel for fun I end up in a hostel more often than anywhere else. I don’t need to spend more than $20 on a nights sleep when I won’t be spending any time there awake anyway!

But when I travel for work I need to be up in the morning smelling good and being well rested. I also need internet in my room, or other non-public area, and a desk that I can work at in the evenings. I won’t often spend more than $100 on a night, but sometimes it is more like $250 depending on the city, and I value every dollar of it!

Sometimes you have pay more to get more, sometimes it is worth it, sometimes it isn’t. What you decide to spend the ‘extra’ money on is a statement of your values. When I am working I value the nights sleep more than I value the money.

Shortly after college I bartended at a pretty exclusive wine/champagne/cognac bar. We were required to attend tastings regularly. What I learned is that after the first drink, it didn’t really matter all that much! After about the 3rd or 4th brand we were trying, it could have been any swill. I had the opportunity to try some really good products – the opus ones, and le grand dames, but I learned they really aren’t that much better than a glass from a decent bottle under $10. Which is good because with the job, mortgage, and responsibilities of later years, I don’t have champagne tastes on my more realistic beer budget!

I think about this a lot, and have enjoyed all the posts and reflection. It’s tough for me to admit that my sensibilities aren’t refined enough to enjoy supposedly higher qualities of some items, but the honesty is healthy for my ego.

My ‘cheap is okay because I can’t really tell the difference’ list:
mac and cheese; dishes/china; rice; blue jeans (thanks, goodwill!); theatre/live performances; red wine; budget hotel rooms

My ‘I’ll pay more for real quality’ list:
kitchen knives; beer; socks; peanut butter; carrots (yes, really); ink pens; books; fruit

Then there’s a long ‘I wouldn’t want it at any price’ list, and a ‘not enough to pay for it’ list, and a few more lists too!

I love live events – however we choose which events we go to carefully. We have wonderful free events in the summer as well as some spectacular events which are under $20. For a treat we will go to a production that comes into town and pay attention to which seats we get – ussually second or third tier – but the sound is still good.

*For those of you who say you don’t like opera but would like to think about the period of the shows that you have seen. Just as music today is very different from the ’50′s operas very greatly as well. Listen to music from different time frames and see what you like best. I love works from the Romantic era (1800′s) especially Puccini!