Nothing says I love you like an arbitrarily fixed number of uniformly coloured flowers wrapped in cellophane and sold at a 50% price premium. Right?
Romance may not lend itself to logic, but market forces do. With the United States alone expected to spend $1.9 billion on flowers for Valentine’s Day, the economist Alex Tabarrok has released a video on the economics of the red rose.
“A rose is a truly global product,” he explains, with producers in Ecuador, Colombia and Kenya all catering to demand in the West for the traditional bouquet. This elaborate process involves “farmer, shipper, auctioneer, retailer, all cooperating to transport roses from field to hand in a matter of days”.
“Through the price system, each individual’s local knowledge and local interest are coordinated with the whole as if, in Adam Smith’s words, guided by an invisible hand,” he adds.
The invisible hand may also deliver a cruel blow to your wallet in the run-up to 14 February. A range of factors – from producers' need to hire temporary manual labour to higher transport costs and, inevitably, the surge in demand – means that roses cost 30-50% more than usual at this time of year.
