We have all justified a little treat here and there. Whether it is buying a coffee before coming to school, shopping after a long week, or delivering food when you are tired, these small purchases can bring you joy when you need them most. This behavior is known as “treatonomics” and represents a defining behavioral shift in modern consumer spending habits. In the wake of economic distress, small purchases can mollify anxiety by acting as a replacement for expensive alternatives without the guilt of overspending. In fact, 73% of Americans feel stressed about personal finances, and 62% indulge in small treats every month.¹ A small purchase can bring a burst of dopamine, bringing a sense of comfort and control that economic stability used to provide. This raises the questions: what is driving customers to trade long-term savings for immediate gratification, how are big corporations profiting off of this shift, and what are the hidden costs of these purchases?

Treatonomics is based on a well-known phenomenon called the “Lipstick Effect”. Researchers found that in the face of economic decline, women tend to spend more money on cosmetic products even though they may need to save that money.² While spending on more essential items such as clothing and food may drop, cosmetics, oddly enough, seem to stay at the forefront. This phenomenon can be summarized as a “feel-good effect” in which consumers may perceive these products as worth it if they can spend a small amount to get something that can bring them joy. In the contemporary era, social media drives the whole cycle: large companies market their products as self-care, encouraging consumers to buy them, which can lead to a macroeconomic shift in spending.³

The first major reason for the popularity of treatonomics is the increase in cost for major economic purchases. Historically, consumers would refrain from indulging in small purchases to save up to buy necessities such as homes or cars; however, these items can cost hundreds of thousands of dollars, making them feel out of reach for new adults. As depicted in the graph below, median prices of homes being sold in the United States have been growing at a steady rate, reaching over $400,000 dollars today compared to 1980, when they were around $75,000.

Figure 1: Median Sales Price of New Houses Sold for the United States, October 16, 2026.

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So, rather than celebrating purchases of these large milestone purchases, consumers are inclined to buy affordable items to fulfill the same gratification. To put this into perspective, 52% of people who indulge in more affordable treats limit themselves to a more tangible $25 maximum.⁴ The $15 cost for a nice cup of coffee has a negligible psychological barrier when compared to that of a larger purchase, therefore making the small, immediate rewards more prominent.

When a hard week or financial struggles hit, you must choose between budgeting and emotional relief. Treatonomics is an anomaly in which people decide to do both. Traditional economic theory would point to saving during hard times, while behavioral economics would prioritize emotional repair. Both ideas are exhibited in modern consumer spending, but what is the real driver for these little treats? According to SurveyMonkey’s annual national survey, 35% of Americans treat themselves to stay motivated, 30% to cope in difficult times, and 27% to celebrate specific milestones. Additionally, this spending habit is more common in Gen Z and Millennials than in Gen X and Boomers, showing how, even between generations, the trend is growing.⁵ As time passes and milestone purchases get further out of reach, these “inchstone” purchases will become primary sources of stress relief or celebration. 

As for the macroeconomic effects of treatonomics, aggregate sales in large retail companies have increased. The issue with a consumer economy run on the lipstick effect is that the economy is hyper-concentrated in the consumable retail market. Large retailers are seeing rising profits on cosmetics and affordable luxury items. Walmart, Amazon, and Costco exhibited revenue gains of 7.0%, 9.0%, and 4.0% in 2024, respectively, as consumer spending has continued to change.⁶ These corporations are poised to take advantage of this craze by offering small items that people want and that will not burn a hole in their wallets. However, although these items may be cheap, the snowball effect of small purchases can add up over time. Kantar’s 2026 Marketing Trends shows that 36% of people are willing to go into short-term debt in order to fund their lifestyle enjoyments and small treats.⁷ What starts off as small treats can snowball into a large sum that is no longer small enough to justify. Ultimately, it is possible that if purchases of small goods increase, personal finances may not just be unfazed by purchases but rather strained by a constant flow of items.

Treatonomics has become one of the most relatable trends of the last decade, making an impact in everyone’s lives whether we notice it or not. Our spending habits have changed from what they once were in the past due to changes in the economy, and that leaves companies wanting a piece of the small treat market. The financial costs of the treat market are hidden behind the facade of the low price tag; in reality, purchases may add up to more than someone may expect, leaving us wondering if the hit of immediate dopamine is really worth it, even though it might seem cheap in the moment. The larger effects of treatonomics continue to be discovered as it gains prominence, but it really does make you more conscious of spending habits that you may not have noticed before.

Notes

1. Sam Gutierrez, "Treatonomics Explained: How Little Treat Culture Is Reshaping Consumer Spending in America," SurveyMonkey, March 6, 2026, https://www.surveymonkey.com/curiosity/treatonomics-consumer-spending/. ↩
2. Alisa Minina Jeunemaitre, "Treatonomics: The Psychology Behind Our Small Splurges," Psychology Today, August 26, 2026, https://www.psychologytoday.com/us/blog/consumption-and-lifestyles/202608/treatonomics-the-psychology-behind-our-small-splurges ↩
3. Matthew Buchko, "Treatonomics: How Economic Uncertainty Is Rebalancing Industry Growth," IBISWorld, November 11, 2025, https://www.ibisworld.com/blog/treatonomics-retail-consumer-goods/1/1126/. ↩
4. Sam Gutierrez, "Treatonomics Explained: How Little Treat Culture Is Reshaping Consumer Spending in America," SurveyMonkey, March 6, 2026, https://www.surveymonkey.com/curiosity/treatonomics-consumer-spending/. ↩
5. Gutierrez, "Treatonomics Explained"; Aarron Atkinson-Toal, "Why We Splurge on Small Luxuries When Money Is Tight," Psychology Today, August 1, 2026, https://www.psychologytoday.com/us/blog/shopping-and-the-mind/202608/why-we-splurge-on-small-luxuries-when-money-is-tight. ↩
6. Buchko, "Treatonomics: How Economic Uncertainty Is Rebalancing Industry Growth"; Atkinson-Toal, "Why We Splurge on Small Luxuries." ↩
7. Gutierrez, "Treatonomics Explained" (including data from Kantar’s 2026 Marketing Trends report). ↩