STEVE CORREA /RONALD D’SOUZA
Recently, I treated myself to a delightful tall glass of urrak, a refreshing local drink from Goa. Made from the first distillation of juicy, ripe cashew apples, urrak is wonderfully light and aromatic—so much smoother than its more potent cousin, feni.
It’s best enjoyed during the sultry months of March to May, and this seasonal delight offers so much more than just a beverage; it really is an experience and a taste of Goa’s earthy simplicity. However, my enjoyment took a brief pause when the bill arrived. I noticed that the price had surged by 25%. While it wasn’t a huge amount in absolute terms, it certainly caught me by surprise! That sudden jolt— a mix of surprise and recalibration— was what economists and marketers call “sticker shock.”
I excitedly shared the story with my co-author, who burst into laughter and mentioned that he had just faced his own series of sticker shocks! His barber had raised his fees by 50%, and his car wash guy took it up a notch with a whopping 60% increase! While these expenses usually don’t throw our monthly budgets off track, it’s really not just about the money; it’s about the surprise. There’s that moment of disbelief when what we thought was true suddenly flips on its head.
At the heart of sticker shock lies our natural habit of holding onto past prices, routines, and expectations. Behavioural economists term this the “anchoring effect”. When we fixate on a specific reference point—like Rs 150 for a haircut— it can be quite challenging to adapt if that anchor changes. Even though we might recognise, on an intellectual level, that inflation is a real factor or that Covid impacted many service businesses, emotionally, we still find ourselves connected to the “old price”.
Isn’t it fascinating how human psychology works? We tend to push back against change, especially when it surprises us. And you know what? Money is surprisingly emotional! It’s about so much more than simple transactions; it’s tied to our feelings about fairness, the value we receive, a sense of predictability, and even who we are. So, when prices suddenly jump, it really makes us question everything we believe about these things.
Surprises can be delightful! Life is full of them, and we love the ones that work in our favour— a bonus at work, a fantastic discount at checkout, or a lovely spontaneous compliment. But it's natural to feel hesitant about surprises that might come with losses or extra costs. This difference in how we respond is what Nobel Laureate Daniel Kahneman called “loss aversion”— our tendency to feel the sting of a loss more deeply than the happiness we get from an equivalent gain.
So, what lies behind these rising prices?
There’s a story there too! Many small businesses— like barbers, car washers, and local drink vendors— have held their prices steady for years, quietly absorbing the pressures of inflation. For some, the pandemic brought on a wave of rising costs that they could no longer overlook. The expenses for raw materials, utilities, and rent have all gradually increased. Sooner or later, those prices needed to go up. However, because these price increases happen all at once instead of little by little, they can really catch people off guard!
Let’s not forget the emotional tightrope that so many service providers navigate. Raising prices can be a tough decision; it often brings the possibility of losing customers, trust, and goodwill. Many providers take their time with this decision, hoping that their customers’ loyalty will balance out any concerns about pricing. When the change finally happens, it might feel sudden to consumers, but it’s usually been a thought-out process on the provider’s side for quite some time.
Interestingly, some price increases reflect not only cost pressures but also a growing sense of confidence. After navigating through a challenging period like the pandemic, a business owner might feel it’s finally their moment to value their work more assertively. For instance, a barber who has dedicated years without a raise may now feel empowered to ask for what they truly believe their services are worth. These decisions go beyond financial aspects; they symbolise important emotional shifts and affirmations of self-worth.
With these changes happening around us, we have a wonderful opportunity to adjust not just our budgets but also our mindsets. Price increases encourage us to take a moment and think about what truly matters to us. Are we ready to invest a little more in relationships built on trust and familiarity? Do we value consistency, or do we find ourselves eager to jump to the next best deal?
And beyond the personal, there’s also a social and systemic aspect to sticker shock that we should consider together. Sudden changes in cost can sometimes be taken advantage of— either cynically or strategically— by politicians, companies, or influencers who want to create a sense of urgency. A steep fuel price hike? That’s when the outrage comes pouring in. A rise in property taxes? You can bet the media will be called in to cover it. These situations are often manipulated to evoke quick, emotional reactions that usually serve those in power. By understanding this pattern, we can take a moment to pause and really think about our responses before jumping in to react.
Sticker shock can sometimes catch us off guard, but it often relates to how we adjust to the changes happening all around us. Our world is evolving so rapidly! Climate events are impacting supply chains, global conflicts are driving commodity prices up, artificial intelligence is transforming our work dynamics, and social media plays a big role in shaping people’s desires. In this unpredictable landscape, price increases are not just likely; they’re almost certain to occur. The real challenge isn't in dodging surprises, but in fostering the flexibility to respond effectively to whatever comes our way.
Navigating our experiences with grace truly shines when we cultivate an attitude of awareness and adaptability. Instead of viewing sticker shock as a setback, we can embrace it as an opportunity for insight—clues that guide us to recognise changes around us. Perhaps that urrak vendor is subtly indicating a new economic landscape in Goa. Maybe my barber is just sharing that his rent has increased. And who knows, the car wash attendant might be looking to invest in better tools or simply hopes to feel acknowledged, appreciated, and respected for all the effort they put in.
In all these stories, the heart of our journey is change. It's not merely about resisting or accepting change; it’s about genuinely understanding it. While feeling sticker shock can catch us off guard, it can ultimately lead us to a richer place of empathy.
Next time you notice a price increase— whether for your favourite drink, a new haircut, or your go-to car wash— take a moment to pause. Let that initial surprise wash over you, and then take a little time to think about what’s behind that change. You might uncover a much richer story filled with resilience, fairness, and the delicate balance between our expectations and the experiences we have.
(Steve Correa is an Executive Coach and Author of The Indian Boss at
Work, Thinking Global, Acting Indian.
Ronald D’Souza has
Corporate and Consulting Experience and mentors
new startups)