The Unprecedented Panic for Home Gyms
At first, it was difficult to understand society’s stampede to stock up on essential goods such as Sorbent’s silky tissues or Dettol’s delicacies. However, this has been taken to the next level with the exorbitant market conditions for gym goods. The rationale behind the severe inflation of fitness equipment is easily explained by its characteristics that yield it as a demand inelastic good. The reliance on these facilities is ingrained in our culture of health and fitness as they have an invaluable benefit on society’s living standards. People have realised the necessity of exercising even when in isolation as a healthy body helps achieve a healthy mind. This begs the question of whether volumes at gyms will return to previous levels with many people now willing to train from home.
The reason why gym equipment has spiked so steeply in price can be explained by its newfound equilibrium. Panic has arisen amongst the general population with the realisation that gyms are shut, and their fitness goals are now compromised. This has led to a rapid demand increase for gym equipment which has driven price upwards. Additionally, demand levels are equivalently high due to the good’s price inelasticity of demand which has caused this new, astronomically high equilibrium. Price elasticity of demand is a microeconomics concept that seeks to explain the relationship between the demand for a good as its price rises.[1] Generally, demand falls as price rises; but it is the sensitivity of demand’s response that we are concerned with. Inelastic demand illustrates a circumstance where demand levels do not change as much as the given change in price. This is the case of gym equipment, as sky high prices have been matched with stubbornly high levels of demand. This phenomena suggests that fitness goods are now necessary items, which highlights the broader trend of how important fitness is for society to function. [2] Fitness has become so popularised, accessible, and broadly penetrative that we simply cannot imagine life without it.
The above diagram illustrates how prices for gym equipment are so high. Demand has shifted from D1 to D2 which has presented both a steep price and quantity increase for the new equilibrium E2. The steepness of the demand curves reflects the demand inelastic nature of the goods as the demand is relatively indifferent to changes in price.
Do you notice that whenever you complete a gruelling gym session or dare we say it, finish an exhausting session of cardio; you feel amazing. This is because of the endorphins that are released when you exercise that allow you to feel so positive [3]. In this sense, exercise is addictive and hence understandable why so many have panicked. This highlights the important economic impact that physical activity has on society in that it boosts non-material living standards. The capacity to exercise as well as its availability in a community is essential for high living standards.[4] This is yet another drawback of isolation as many are struggling to exercise to the same degree that they used to. This takes its toll on living standards so people ought to do what they can to keep active through these tough times. With more people looking to upgrade their home gyms with currently scarce gym goods, will as many people return to gyms when they reopen? Training from home reduces travel costs and increases privacy, however, an actual gym houses a greater array of equipment and is potentially more motivating to attend.[5] It is difficult to see which way the population will behave but it is a possible restructuring of fitness as we know it.
Today’s prevailing context ranks gym equipment up there with some of the most essential goods. Who would have thought that a squat rack would have caused more of a knee-jerk reaction than a supply of fresh food? The role of fitness in our community is beneficial both personally and economically which helps to explain our yearn for it to return unhindered. Are you impatiently waiting for your iron haven or is training from home a more likely prospect?
[1] Goel, R. K., Hsieh, E. T., Nelson, M. A., & Ram, R. (2006). Demand elasticities for Internet services. Applied Economics, 38(9), 975–980. https://doi-org.ezproxy.lib.monash.edu.au/10.1080/00036840600581448
[2] Betterhealth.vic.gov.au. 2012. Physical Activity – It’s Important. [online] Available at: <https://www.betterhealth.vic.gov.au/health/healthyliving/physical-activity-its-important> [Accessed 20 April 2020].
[3] Lubans, D., Richards, J., Hillman, C., Faulkner, G., Beauchamp, M., Nilsson, M., Kelly, P., Smith, J., Raine, L. and Biddle, S., 2016. Physical Activity for Cognitive and Mental Health in Youth: A Systematic Review of Mechanisms. PEDIATRICS, 138(3), pp.e20161642-e20161642.
[4] Veneri, P. and Murtin, F., 2018. Where are the highest living standards? Measuring well-being and inclusiveness in OECD regions. Regional Studies, 53(5), pp.657-666.
[5] McKay, B., 2016. The Pros And Cons Of Garage Vs. Membership Gyms | The Art Of Manliness. [online] The Art of Manliness. Available at: <https://www.artofmanliness.com/articles/garage-vs-commercial-gyms/> [Accessed 20 April 2020].
Image: Gabriel Chenkov-Shaw