imageAhhhh summer. A time for dusting off those bikinis and bike pants, with most of us still looking like Count Dracula in the daylight and sporting ripples that only a winter coat can hide. It’s the season of barbecues, vacations, school breaks, and for a tenth of the adult population each year, the high school reunion! This rite of passage is like the flux capacitor that hurdles us back to our shallow teenage roots, and a mass convergence towards societal norms. As I approach my 20th reunion in a few short weeks, I can’t help but explore the economics behind this pimply ritual, with the added bonus lesson of better preparing my graduate students for the world.

So there are a number of ways I could twist the high school reunion into an economics lesson. To name a few…irrational expectations, perverse incentives, competition, and self selection bias. However, all of these stem from the common denominator of what we perceive as ‘value’ in society. For example, we develop irrational expectations of ourselves and others based on the value we place on certain achievements or personality traits. We compete based on this value system to outshine our peers, and we self select into reunion attendance based in part on our ability to project those values (falsely or not) to others.

So what do I mean by ‘value’ exactly? In economics, value is typically defined as the benefit you get from something, such as a good or service. So if you perceive something to be more valuable, you are willing to pay more (or do more) to get it. To understand what I mean by value in the case of reunions, let’s rewind back to high school ‘notables’. As a class, we assigned value based on certain desirable character traits such as ‘most likely to succeed’, ‘cutest’, ‘funniest’, etc. Fast forward to the reunion, and similar awards are often handed out to those perceived most ‘valuable’ among the class alums.

This leads me to the heart of this lesson – the ‘paradox of value’. The paradox identifies the apparent contradiction that things necessary to sustain and support life are often valued less highly than things we don’t need, with water and diamonds as the classic example (also referred to as the diamond-water paradox). From a neoclassical perspective, we can explain the mechanics of this paradox with a simple supply and demand graph. But it doesn’t disguise the point that our perception of value, if by value we mean things that really matter, is indeed fundamentally flawed.

Going back to those notables and awards, how about we take a moment to shake it up a bit? Because really, if you are good looking and successful now, chances are that your parents were also good looking and successful. Research shows that the dice are clearly loaded in favor of genetics and intergenerational transfers. Why not assign value based on the actual level of difficulty of life challenges and skip the popular preppies altogether? We might top the list of notables with ‘most kids out of wedlock’ or ‘most divorces’ or ‘longest time spent on unemployment’. Why not value our life challenges and differences as highly as those determined by circumstance and social norms? We might all learn something by dropping the silver spoon awards and taking a moment to truly look at our peers.

And so I challenge us to celebrate our differences, instead of exaggerate our likenesses. To support this cause, maybe we could all wear our weaknesses on our sleeves, literally. Why not add a dose of reality to our name tag…under ‘Hi, my name is Mary’, something like ‘I’m skinny because I’m too nervous to eat’ or ‘I’m a struggling single parent’ or ‘I barely survived divorce’ or maybe just ‘Haters, kiss my ass’ right next to a big rainbow sticker.

So that is my lesson for today in the paradox of value, high school reunion style. As for me, I can’t wait to rock the 90s with many old friends equally flawed as myself and not afraid to show it. Go Blue Devils!