The other morning in a suburban car park my son and his cousin saw a Lotus. They squealed and ogled at the thing. As someone who has no real interest in cars, this behaviour came as a bit of a surprise but it got me thinking about why we buy certain things.
What might have been going on in the guy’s head when he bought such a motor?
In evolutionary anthropology there is a fascinating theory called “signalling”. This focuses on how the male of the species signals to potential mates that he has better genes than the rest. Therefore, the choosy female should prefer him to other lads if she wants strong children.
So important is the quality of the female to animals, the theory contends that certain animals will have, over thousands of years, developed an attribute which attracts the female, but may be actually harmful to the everyday life of the male – when he is not thinking of getting his leg over! This is called a “costly signal”.
The classic example of a costly signal is the peacock’s tail. The quality of the tail – its size, colour, luminosity, and symmetry – serves as a signal of the quality of the peacock’s genes to potential peahens!
But a high-quality tail is costly because it takes so much energy and resources to grow and maintain such a resplendent ornament, which is useless and, maybe even detrimental in other aspects of a peacock’s life.
A high-quality tail is an signal of good genes because only those peacocks who are in good health and who have the traits required to survive and acquire abundant supplies of food, can afford to waste their energy and resources to grow and maintain this showy and nutritionally costly ornament
The tail is almost useless in every other area but the male peacock is signalling to the women “Hey babe, check out my massive tail and if you think this is big, just imagine what shape my ‘you-know-what is in'”!
Let’s now return to economics.
Signalling is very important in human behaviour. We all know this, but sometimes don’t like to admit it. We buy stuff that we know sends out all sorts of signals about the type of people we are or want to be.
Nowhere is this more evident than in the cars we drive.
Long ago, cars ceased to be valued on the basis of their actual functional ability – getting you from A to B. All cars get you from A to B. Granted, there are issues of fuel consumption and price, but the battle in certain areas of the car market is a signalling one.
What does the car say about me?
It is also a very costly signal because, like the peacock’s tail, a new car is also costly to maintain – a burden amplified because a new car’s value depreciates immediately.
Yet, as a signalling device a new car is extraordinarily important.
In many cases, your choice of car isn’t just a signal screaming “I like that” it is also signalling “I am like that”.
It signals that you are part of this tribe. You are a Mercedes or and Audi or Mini type of person.
A Mercedes signals something different to a Fiat, which signals something different to a VW or a Dacia.
All of these decisions are clear signals that tell the world the type of person you are. The car is your tail and this type of analysis is the soft psychological spot occupied by advertising agencies that try to frame these signals and make peoples’ minds up for them.
Most of us argue that we are immune to these brand signals, but are we?
Another crucial signal is when we bought the car and how new it is. Obviously the newer and more upscale the car, the richer we are and if that’s your thing as a potential mate, the more eligible we are.
This is where the government comes in because by introducing the annual license plate years ago, it profoundly changed people’s buying behaviour. It caused people to buy in the early part of the year and stop buying as the year went on, postponing the purchase until the New Year when the car could be new and the person could signal
“Hey look, I just bought a car.”
What’s the point of buying a 2014 car in December if people thought you bought it in January and it was therefore, not brand, spanking new? As a result, you will hold off until January when you have a bragging window of a few months to signal your wealth or income!
You think I am making this up?
I am not!
Just look at the pattern of car buying in Ireland. Look at the reality. Historically 65pc of the registrations were done in the first quarter. That’s the signalling for you.
If you doubted the extent of signaling and how important bragging is to us, consider the introduction of another new car registration date in July, introduced last year, 2013, for the first time.
The introduction of the new date – effectively splitting the year in half give an extra opportunity to brag, to signal and, it has been amazingly successful.
July used to be a dead month for car sales as we know from the sales results for 2012. Now July is the second largest month in the motor sales calendar and this second registration peak has helped boost registrations and reduce reliance of the market on the first quarter.
What is going on?
The peacock is showing his resplendent tail!
New car registrations, like much of the rest of the economy, are moving ahead rapidly. Take time to look around you and see that we are all susceptible to signaling – even if we would not like to ‘fess up to it!