FEATURE l The Psychology Behind a ₱200 Coffee and a ₱50 Lunch: Which Feels More Worth It?

Next time you think twice about a ₱50 lunch but not about a ₱200 drink, ask yourself: Is it really about the price? Or is it about how I’ve labeled its value in my mind? 

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On a hot Monday morning on the way to work, you suddenly crave a hazelnut mocha macchiato with extra caramel drizzle.  

You did not think twice and immediately walked into the Starbucks near your office. You tap your card, wait for the barista to call your name, and soon you're sipping a ₱200 drink, treating it like a hard-earned reward or perhaps just a head start on another long week. 

When lunchtime rolls around, you hear your stomach growling. You wanted something full-packed—a fast-food bento or a home-cooked meal from a carinderia. Yet, your daily food budget can’t stretch that far. 

You hesitate before stepping out.  

Then you think, "Maybe I can get by with street food for less than ₱50." 

In economics, we learned that money is fungible. A ₱200 spent on coffee is the same as ₱200 spent on rice, medicine, or savings—it's interchangeable. 

But in real life, we don’t always treat it that way. 

We justify splurging on premium coffee because we want it. It feels like a reward, a little luxury we earned. Meanwhile, the idea of spending the same amount on a full meal feels excessive, simply because it's a necessity. 

This is mental accounting—our tendency to categorize and treat money differently depending on how we mentally label it. 

This behavioral bias, coined by economist Richard Thaler, helps explain why we might treat a ₱200 coffee as a "treat" while viewing a ₱200 lunch as “too much.” In theory, a rational person would treat all money equally because money is fungible. But in practice, we don’t. We separate our finances into invisible mental buckets: one for bills, another for leisure, and maybe one labeled “rewards” for when we feel we’ve earned something. 

In Thaler’s experiments, people were far more willing to gamble or take risks with money that felt like a bonus or gift, compared to money they saw as part of their regular income. Even if the amount was the same, how the money was presented—or framed—changed how people used it. 

In our sample case, the coffee felt earned, even empowering, for a motivational boost. But the lunch? That feels like a practicality you’re expected to cut down on when times get tight. So, even though both purchases cost the same, they carry different emotional weights based on how they’re mentally accounted for. 

Sometimes, mental accounting can lead us to make irrational decisions. Other times, it helps us save or delay gratification. However, it always challenges the logic of traditional economics and finance. 

So, next time you think twice about a ₱50 lunch but not about a ₱200 drink, ask yourself: Is it really about the price? Or is it about how I’ve labeled its value in my mind? 

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 References: 

Thaler, R. H. (1999, July 19). Mental accounting matters. Journal of Behavioral Decision Making, 12(3), 183–206. https://doi.org/10.1002/(SICI)1099-0771(199909)12:3<183::AID-BDM318>3.0.CO;2-F. 

BehavioralEconomics.com. (n.d.). Mental accounting. https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/mental-accounting/.