IDEX Online Research: Better-Educated Consumers Spend More on Jewelry

Sy Syms, the famous American menswear retailer, popularized the expression that “an educated consumer is our best customer.” That adage is also true, in a different sense, for jewelers. When it comes to jewelry expenditures, consumers spend in direct proportion to their educational level: the highest and best-educated consumers spend the most on jewelry.

Consumers with a college education spend over two-and-a-quarter times more on jewelry than a consumer with only a high school graduate. Consumers with a post-college graduate degree (for example, a Ph.D.) spend triple the amount on jewelry versus a high school graduate.

The disparity is even greater when comparing the highest-spending consumers (post-graduate degrees) versus a consumer who did not complete high school: the best-educated consumers’ jewelry spending was about seven times as much in a year as the jewelry spending of a high school dropout. Interestingly, this disparity has narrowed from prior years.

Occupation and income explain some of this spending disparity, but not all of it. For example, households where shoppers have post-graduate degrees earn three-and-a-half times as much as a high-school dropout, but their jewelry expenditures are dramatically greater – about seven times as much, as noted in the prior paragraph.

The following graph summarizes jewelry expenditures by education level for U.S. consumers.

Source: CES

When jewelry expenditures by educational level for 2006 are compared to those for 2005, it is clear that the spending disparity narrowed in 2006. This is in line with expansion of the total jewelry market: 2006 marked a year in which the jewelry industry reached new consumers in virtually all demographic groups. While high school grads spent about $386 per household on jewelry in 2006, they spent about $343 per household in 2005. On the other hand, highly educated consumers spent about $875 on jewelry in 2006, down from $926 in 2005. The graph below summarizes jewelry expenditures by educational level for the prior year – 2005.

Source: CES

Market Size of High School Grads Is Surprising

Many jewelers use total market spending potential, rather than spending per household, as a way to measure market potential. The theory is simple: spending per household may be high, but if there aren’t many households, there isn’t much of a market.

When it comes to educational levels, the aggregate market size of high school educated consumers is slightly larger than the aggregate market size for college-educated consumers. Why is this? There are about 85.6 million households with only a high school education, but there are about 33.2 million households with a college degree. While the spending per household of high school educated consumers is not large, they wield huge buying power as a group.

The graph below illustrates the aggregate spending power of American consumers with only a high school diploma when compared to their college-educated counterparts.

Source: CES