Economic Models and Rational Consumers
The concept of utility maximization should indicate that rational people will go to the gym regularly to maximize the benefits of the monthly membership they had already paid for. Furthermore, gym memberships can be categorized as leisure goods so it is positively elastic: demand rises more than the change in income. However, economic models have failed to plug in “human optimism” into their equations. People are simply too optimistic about their willpower to work out, choosing to commit to a contract rather than pay per use (Barro, 2015).
The Presence of Substitutes
The advantage of going to the gym is that there is a reinforcing atmosphere. It is an enabling environment for fitness. However, it can get expensive. Aside from the cost of a monthly or annual gym membership, a person has to spend for athletic wear plus transportation costs plus food and drinks after workout. Add in the socialization factor and the expenses quickly add up. Running, working out at home with a DVD are some of the popular substitutes. However, these options take even more discipline and willpower due to the absence of a reinforcing environment.
The Reality for Gym-goers
Just like in any decision-making process, the decision to go to the gym and work out has some associated opportunity costs. Working out before heading out to the office has an opportunity costs of waking up early and losing an extra hour or two of sleep. Going to the gym at the end of the workday means losing out on opportunities for happy hour, running errands such as doing laundry or grocery shopping, and spending time with family and friends. Time is finite, there are only twenty-four hours in a day and global trends indicate that working hours are getting longer. Decisions are all about prioritizing and for many people the value added from going to the gym is less than the opportunity costs, therefore many people forgo the gym despite already paying for it and do something else instead. Thus the only way to get people to the gym is to incentivize them so that the benefits outweigh the opportunity costs, making it the more attractive activity (Thompson, 2012).
Works Cited:
Barro, Josh. “How to Make Yourself Go to the Gym.” The New York Times. 10 January 2015. Web. 25 June 2015.
Thompson, D. “This Is Why You Don't Go to the Gym.” The Atlantic. 13 January 2012. Web. 25 June 2015.
