Is pumpkin spice basic? No, it’s economics, expert says
Pumpkin spice lattes are back on the menu – and a Virginia Tech economist says the sudden desire for pumpkin spice and apple cinnamon treats this time of year is a great example of how scarcity, and emotion, can drive seasonal demand for a product.
“Part of the joy from these items comes from the fact that they aren’t available two-thirds of the year,” says Jadrian Wooten, a collegiate associate professor of economics at Virginia Tech. “That first taste brings back positive memories for people, but eventually that nostalgia wears off. The second drink may still be really good, but it’s usually not as good as the first one. The same phenomenon happens with the third drink, fourth drink, and so on. By the time we have our twentieth pumpkin spice latte of the year, it’s time to start thinking about switching to peppermint mochas.”
Wooten says that if we convert that experience to economic language, drinking pumpkin spice lattes and eating pumpkin spice foods are each subject to diminishing marginal utility.
“Even though there may be an increase in demand, the release of pumpkin spiced items simply increases the happiness we gain overall. After enough time, that happiness wears down and we’re ready for the next seasonal treat. Thus, leaving the beverage off the menu and items off the shelves creates that longing. In a sense, pumpkin spice scarcity creates demand for pumpkin spice products,” he said.
Jadrian Wooten is collegiate associate professor at Virginia Tech within the Department of Economics and is the author of Parks and Recreation and Economics. Read more about the demand for Pumpkin Spice in his weekly Monday Morning Economist newsletter.
Watch Wooten discuss the economics of pumpkin spice on WTTG (FOX) DC.
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