A very good friend of mine who is from the other side of the world is going home in a couple of weeks. And as is customary when this happens, all her relatives and friends from home send her lists of things they’d like her to buy from the UK and take back with her.

One of the items on the list was a hand bag. What made this hand bag different from any other hand bag was the very big price tag it carried. Who would buy a hand bag for a nearly £1000?

It was a controversial question. Who would pay that much for a hand bag? And who would have the guts to charge that much in the first place?

But who was I kidding? It was not the first time I had come across products that were severely over priced. A wander through Harvey Nichol’s in Leeds during my student years while playing “Let’s see what I can’t afford” gave me the opportunity to see a £500 belt and try on a £2000 blazer. I also saw a £30 toothbrush – that wasn’t electric.

It wasn’t just a case of the products being over priced. It was more than that. It was deeper. It was offensive. The idea that there existed people who would spend £1000 on something you could get for £100 or less got under my skin. When there are children starving in Africa and widespread poverty in the third world, how could anybody believe their surplus £1000 was better spent on a hand bag?

But I guess when you think about it, it all comes down to value. And value is a funny thing. Because it isn’t an exact science. Value is created in the minds of consumers. And most of the time, if you can’t believe your eyes when you look at how much something costs, it usually means you cannot see the value in it.

Take my recent haircut for example. Since I was about 12 years old, I’ve always had a £5 haircut from the same barber shop close to where I live. A couple of Thursdays ago, I punted for a trip to a hairdressing salon. I paid 400% of what I’d paid for the past 12 years – £20, but there was an obvious difference in the end product, and in the experience of getting a haircut itself.

Or take the last thing I paid over £1000 for. I can’t even touch it. Ownership of magicmegastore.com cost me £1500. Ownership of a sequence of 14 characters with a .com extension and I was prepared to cash in one of my savings accounts to pay for it.

This is something that almost nobody I know in day to day life will understand. How could a domain name that didn’t even have a page rank be worth so much? Well, the truth is that $2000 (exactly what I paid) for a domain name isnt even that expensive. Hundreds of thousands have been spent on acquiring domain names.

But that doesn’t really surprise me because I can see the value in a domain. If I couldn’t, I wouldn’t have paid that price for my own. Already owning the .co.uk version, having tested the market, and having a functioning business named after it, I had proved that magicmegastore.com would be valueable to me. Buying it expanded my market place by about 300 million people. It would, in the future, allow me to open up shop in the USA. And, it was the right time to buy, if I waited until MagicMegaStore.co.uk is well known, the seller would have seen me coming and could have got a lot more for the same product.

But a hand bag? What was the value of a hand bag? Because it fairly obviously wasn’t anything to do with functionality. And since that’s what my man-brain seems most interested in when it comes to things like bags, maybe that is why I still cannot fathom why anybody would pay that much for it.

I wasn’t going to buy any story that claimed she wanted to buy the hand bag because she liked it, which is a reason I hear from women often, when they buy something that I can’t fathom the price of. Surely it is impossible to like any hand bag so much that you’d be willing to pay the price of a second hand car to own it.

First of all, you have to get into the world of the buyer. To spend a grand on a hand bag, a thousand pounds cannot be a sum of money that you consdier to be a lot.

Second, it must have to do with status. A bag that costs £1000 has to look like it cost that much. It has to communicate to the people she comes into contact with that it is an expensive bag. It has to say, “She who carries me on her arm is loaded.”

But I think it goes even further than that. Designer products are not designed simply to communicate to everybody else that the owner is very well off. They’re designed to make the owner – and everybody around him/her – feel a certain way. And I think herein lies the key. Is it really a hand bag they are selling? Well, yes. But not just. Because somewhere on that hand bag is the word GUCCI or PRADA or LOUIS VUTTON. And attached to that word is an emotion. Ownership of the product makes people feel an emotion. As L’oreal puts it, “Because I’m Worth It”.

It’s a curious and intriguing faccett of human nature and psychology – the belief that states, “If I own lots of sexy things, then I myself become sexy.” And I think that that is all anybody wants. To be sexy. Or, perhaps more specifically, for others to believe them to be sexy.

When you think about it, a person, most of the time, cannot see themselves. Their own face is something they don’t see too often. As I write this, all I see of myself is my hands, my arms and my lap. But around me I can see a bunch of sexy looking things: a nice new Asus gaming mouse; a triple monitor setup; all the literature regarding the soon coming Applie iPhone4. I am more likely to judge myself based on the possessions I see around me, than by my face.

So in a way, buying designer clothes is buying into a belief system; allowing their billion dollar brain washing campaigns (they call it advertising) to install software on your brain.

And as evidenced by the price difference between a genuine product and it’s bootlegged clone, the stunning thing is that the emotion has a far higher value than the product itself.

But then is that really so hard to believe?

If we really get down and dirty and think about this with brutal honesty, do we not all spend more money on feeling good about ourselves and trying to convince others we are “worth it”, than we do on actually getting by? You can buy a pair of jeans for a tenner at Primark. And yet Levi’s aren’t going out of business selling them for £60 plus.

So, who would buy a £1000 hand bag?

Well it might not be a hand bag and it might not be £1000. But I think, figuratively speaking, most people would.