The Economics Behind #GirlMath

By Ananya J., Junior Editor

A research paper titled “From Cradles to Canes: the Cost of being a Female Consumer”, noted that throughout the course of their lives, women pay a “gender tax”, wherein they incur a hefty amount to purchase similar products as men. To give you an idea of this hefty amount, the state of California noted that women have to pay approximately $1,351 more to access the same services as men.
Not only do women have to spend disproportionately more, barriers like glass ceiling and gender pay gap lead to underrepresentation of women in the upper part of the earning bracket, inevitably earning less than men.. Added to this entrenched market biases, are the woes of being stereotyped as financially callous and their intricate consumption habits being reduced to sexist jokes like “women be shopping”.
In such an economically challenging environment which is rooting for women to fail, you go shopping, say for books. As an avid reader and book ‘hoarder’, you are faced with a dilemma while considering the purchase of a whopping $100 book. You are torn between your desire to own it, but are hesitant, knowing very well that a cheaper, less aesthetically pleasing copy would also (sigh), do just fine. As your shopping companion, I use my well versed skills in girl math and introduce you to the fictional concept of “cost per sniff”. I argue that investing in a hardcover edition of the book is justified by its ability to retain its old, beautiful book smell for a longer period, also suggesting that it would not depreciate as fast as the lowly paperbacks. You are not very convinced, so I take a step further and tell you how you are actually saving while buying. As hardcover books take up more space on your bookshelf, this added space occupancy will dis-incentivise you to purchase more books. You know this logic is bogus, but it helps you mentally belittle the price, hence successfully minimizing the financial commitment associated with it.
You are convinced and immediately feel better about your decision.

The above dilemma faced by the shopper is known as the “buyer’s remorse”. It is characterized by the feelings of self loathing, regret and anxiety in response to an expensive purchase. These emotions arise when individuals believe they have made an impulsive, irrational decision. This is where girl math comes into the picture. It is a popular TikTok trend, where women humorously detail their thought process to justify spending their money on seemingly frivolous goods. These intricate calculations are done to rationalize the expenses incurred and thereby reduce the propensity of feeling the buyers remorse.

With over 844 million views on TikTok, #GirlMath serves as a significant case study for the field of Behavioural Economics. This field, incorporates elements of psychology with economics to understand how people actually make decisions in the real world. It challenges the neoclassical economic assumption that individuals always act rationally, disregarding the role of impulsivity and emotions.

Analyzing the above anecdote from an economic lens, ‘The cost per sniff’ calculation is used to refer to the concept of ‘cost per wear/use’, signifying the cost of an item divided by its frequency of use. Many girl math memes justify expensive purchases using this concept. An economically sound logic, expensive designer products, specifically handbags are considered great wardrobe investments. Such bags not only last long, but the emotional costs associated with them are also accounted for in the cost benefit analysis as they represent a fulfilment of aspirations for many women. This status signaling is increasingly becoming a trait of consumer behavior. Accumulating such a social capital also opens up other economic avenues for women.

Another popular girl math rule that corresponds with the principles of economics is, “when you buy a concert ticket in August but the concert is in March so by that time it is basically free”. This idea adheres to the concept of sunk cost, that is the cost that has already been incurred and cannot be recovered. Thus, according to economic rationality, these costs should not factor into current decision making and this is exactly what the girl math says one should do by suggesting that the tickets are ‘basically free’.

So, are we thinking like economists by using girl math? Are we being completely rational?
Obviously not, but we are being, what behavioural economists call, ‘predictably irrational’. This suggests that individuals follow a predictable pattern of irrational decision-making.If some girl math rules depict economics in practice, many others work under a questionable illusion, falling victim to behavioural biases. One such cognitive bias is mental accounting.Coined by Economist Richer Thaler, mental accounting refers to treating money as less fungible than it actually is. It is the tendency to categorize money into different accounts, earmarking each, for a specific purpose or expenditure. A common girl math example depicting this bias is “anything bought from cash is actually free because it doesn’t show up in my bank account.” Segregating their financial resources into cash and card transactions, gives them a deceptive illusion that cash transactions do not have an impact on their financial situation, which is misleading and may lead to sub optimal decisions. This bias also resembles the ostrich effect as individuals actively evade transactional information by avoiding card usage, adhering to the “out of sight, out of mind” principle.

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But one must note that such a bias is not just limited to women, as the term ‘girl math’ may wrongfully imply. Rather, it is much more ubiquitously prevalent in the investment sector, with the mostly male “Wolf(s) of the Wall Street” suffering greater susceptibility to such a bias. During the period of economic boom leading up to the 2008 financial crisis, many investors motivated by greed, improperly diversified investment portfolios due to mental accounting bias and started making increasingly risky investments in response to recent gains. As a result, the collapse of many risky investment accounts when the bubble burst exacerbated the scale of the financial crisis.

It is worth noting that Christine Lagarde, the then IMF head said, “If it had been Lehman Sisters rather than Lehman Brothers, the world might well look a lot different today.” Girl math is a very new infantilised name for a very old practice of mental gymnastics; common to everyone irrespective of sex. The trend and its associated ‘rules’ are merely a coping mechanism to humorise how expensive it is to be a woman in this economy and how prolonged that experience is, given that women live longer than men. The trend is an unserious celebration of illogicality of human behavior in the face of crisis and hence, should be seen as one.

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