I was walking a student of mine through a particularly thorny concept in microeconomics the other day when I realized it had direct ramifications when it came to what I purchased and how I review here on Spirit Animal.


The concept we're dealing with is one called "the price elasticity of demand" (what a mouthful of a phrase). The textbook definition described this as the change in the demand of a particular product in response to changes in its price. In layman's terms, the more "elastic" a product was, the more a change in price would cause people to either to gobble it up if the price fell or avoid it like the plague if the price spiked. 

What I found most fascinating was that the textbook mentioned that one of the main factors of elasticity was the presence of what they called "close substitutes." For example, let's say that you have a cat and you usually buy Meow Mix. Suddenly, Meow Mix starts charging an extra $5 a bag. If you're like me, you'll say, "Hey: the cat probably isn't going to starve if he starts eating Friskies, so I'll switch to that." Cat food is cat food. So that's elastic as all hell.

However, if Apple charges $600 or $800 for an iPhone 7 and I need a new phone, I'm stuck. I've owned other phones and I've owned an iPhone, so within reason, what they charge is what I'll pay unless it causes me financial hardship. That makes Apple something of an inelastic good. There aren't any close substitutes. 
 

Inelastic Booze

One of the hallmarks of a three-star product around these parts is the sensation of a clear, focused taste sensation. At this point, I've tasted hundreds of different whiskies, but none taste exactly like the Ardbeg Corryvreckan. That huge, oily hit of maritime flavors is a taste unique unto itself. As a result, there's less hand-wringing when it comes to seeing a price tag in the $80 range. It's a fair price, and there are no close substitutes, so there's less mental discussion I have in terms of worth. When I want to take the ride, I eat the cost.

 
As inelastic as either water or a pineapple, let's say.

As inelastic as either water or a pineapple, let's say.

 

Even for something much less rare, such as Martin Miller's gin, I'd still buy it at $30 a bottle. Maybe even $40 a bottle. I like the gin so much that I'd still seek it out and cheerfully consume it if I didn't feel like I was being charged exploitative prices for it. My friend Jason once mentioned that he interpreted a max-score review as a suggestion to "Buy at any price." This directly hints at an inelastic product. The experience is so good that whatever a merchandiser charges seems more than fair. 
 

Elastic Booze

But how about something like Deanston 10? Despite the hullabaloo about organic or craft production, I find it to be a very middle-of-the-road bottle of single malt. In terms of its flavor, there are a tremendous number of close substitutes. To my taste, Deanston's core flavors are oak and apple, which can be found just as easily in much cheaper offerings from Speyburn, Glenfiddich, and Glenlivet. The flavors are so close, that I can directly substitute them for Deanston, and the high price of Deanston encourages me to do exactly that.

 
Pretty damned elastic.

Pretty damned elastic.

 

As a result, Jason's understanding of my one-star ratings as generally equivalent to "Buy it if it's on sale" holds true here. Maybe I could better place the faults of Deanston into perspective if it were $30, and I'd look at it more favorably when juxtaposed with the other competitors at a price point of so-and-so. The issue is that since Deanston 10 seems like a commodity—i.e., a vaguely orchard fruit-tasting scotch—I feel stupid for paying more when other bottles will deliver a nearly identical experience. Or at least one that's "close enough" to what I'd want from Deanston. 
 

The Two-Star Bottle: Somewhere in Between

All of that considered, it's probably a decent rule of thumb around here that if the three-star bottle is both distinctive and undervalued, and if the one-star is neither, then the two-star is most usually one or the other. Something like the Oban DE is incredibly tasty and distinctive, but it's spendy. If the price went up another ten bucks, I'd really need to think about it. It's slightly inelastic.

 
Slightly elastic for 300, Alex.

Slightly elastic for 300, Alex.

 

On the other hand, a bottle of vodka like Reyka is a great value, and in terms of taste it's good enough. Here, the rating reflects my perception of value; the asking price is commensurate with perceived quality. That said, Reyka is extremely elastic. If they wanted another $10 a bottle, I think they'd be out on their ass.


My point?

If I do have a point at all, I suppose that the whiskies, gins, rums, and whatever else we talk about here obide by elementary economic theories. And by extension, so do my ratings.  Someone might (fairly) criticize me for choosing to allow my ratings to be so heavily swayed by a concept as fickle as price. I still think it's the least worst of a series of ratings options. When in doubt, read the review, decide for yourself, and remember that there's few aspects of our modern lives that aren't at least partially shaped by the principles of economics. However chilling of a conclusion that might be.  

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