Weddings cost a lot of money and many people are willing to pay a premium for the event of their dreams. The cost of the average wedding dress was $1,121 in 2011 and the typical wedding cost just over $27,000, slightly down from a few years ago.
Getting married and also marked
A couple’s wedding day is one of the most special days of their lives and one they will look back on fondly. The wedding industry knows full well how much it means to people emotionally. They also know that people are consequently willing to pay handsomely for things like catering and wedding dresses.
The cost of the typical wedding dress last year, according to the Daily Mail, was $1,121, according to a joint survey by TheKnot.com and Weddingchannel.com. However, the dress might have cost as little as one-third of that to make.
A recent investigative report by Caitlin Kenney for NPR’s Planet Money found her Enzoani gown, which she paid $2,700 for, likely cost $700 at most to make. Enzoani was charging $3,500, but she shopped for a better deal. Still, that’s a 500 percent markup.
Forces at work
In the video, Kenney reports that economists cite two factors at work when it comes to the substantial wedding dress markup. First is “asymmetric information,” which is where one party has more information than the other. In the case of wedding dresses, the seller knows more about things like the materials and cost to produce it than the buyer knows.
The other factor is what’s called “signaling,” meaning a good is purchased partially for the message it sends. For instance, a person who wants a car with a V-8 can buy a Chevrolet Camaro with a V-8 for much cheaper than a Jaguar. However, a person buys a Jaguar because it’s a Jaguar; it sends a message.
Wedding spending ticking up
Various estimates showt wedding spending has increased in recent years. According to ABC, TheKnot and Weddingchannel, the average wedding in 2011 cost $27,021. However, it was an increase from 2010, when the typical wedding cost $28,985.
According to Reuters, the venue typically accounts for 50 percent of costs. The typical wedding involved 140 guests, at a cost of $196 per person. Eleven percent of couples spent $40,000 or more and 20 percent spent $30,000 or more. Costs varied by region, as West Virginians paid $14,203 on average, compared to $53,069 for Chicagoans and $65,824 in New York.
The Wedding Report, an ongoing wedding data compilation, according to the Chicago Tribune, pegged weddings as a $68 billion industry as of 2006. However, wedding spending was estimated by Brides American Wedding Studies to have declined to $56 billion for 2011.
Reuters, TheKnot and WeddingChannel estimate 77 percent of couples shouldered at least some of the costs of their wedding.
Chicago Tribune: http://articles.chicagotribune.com/2012-04-04/news/sns-201204041200usnewsusnwr201204030403weddingapr04_1_wedding-report-average-wedding-wedding-industry