Shrinking portions is the simplest way. The other is replacing products.
Say supermarket bakery introduces new bread with seasame seeds only 25¢ more. Then slowly there is only new seasame seeds bread on shelves and regular bread becomes rare. Later seasame seeds is slowly dispearing from bread and voila - you have made regular bread 25¢ more expensive.
The other way is lowering quality of products. Inflation basket still contains basic bread, tomatoes and plain sausage. The problem is that the quality of these products tanked and to buy a bread of a quality of simple bread from 40 years ago you must shop in some premium, organic, hipsters bakery where it costs 10 times more then simple bread. Same goes for tomatoes and sausage.
And electric drills or washing maschines? Don't get me started. Today's Bosch electric drill lasts one building season, my fathers Bosch electric drill lasted 35 years. Price is the same or lower but you get way less for it.
But the inflation headline number stays low. And that matters as you can keep wages low (many pensions are inflation indexed). And as people used to say under communism -"Bread is more expensive but locomotives got cheaper".
>>And electric drills or washing maschines? Don't get me started. Today's Bosch electric drill lasts one building season, my fathers Bosch electric drill lasted 35 years. Price is the same or lower but you get way less for it.
Survivor bias?
Statistics show that at least one major product category, cars, are seeing their lifespan increase:
In Sweden, "jämförelsepris" (comparison price) is mandatory for many goods. This means stores have to, in addition to price, display "price per gram" or whatever unit makes sense.
This way, you can quickly compare different groceries despite differing packages, and shrinking the item for the same price would be visible when looking at the comparison price.
This is an EU rule, no? Because it's not just Sweden.
Still, tbh, it still works on some items. Eg here most producer gradually shrinked yoghurt from 175 to 140g - pisses me off, but I must assume it works.
Sweden passed the law in 1991 and joined the EU in 1995 — and as usual, stating "this exists in country X" is not insinuating "this only exists in country X".
FWIW, I was actually, honestly wondering whether this is now an EU rule. Didn't know Sweden initiated this, good for you guys, obviously it's a fairly advanced society so one would expect a lot of the good EU ideas come from you. But I was merely wondering if it was just mimicked everywhere, or it is now a formal EU rule (I suspect the latter since unfortunately our politicians are not quick to adopt good ideas, unless said ideas are somehow forced on them)
You’re being over sensitive I think. The reply isn’t “correcting” you - it actually adds information. Strictly speaking you are correct but generally if a fact is qualified by a restriction like “this exists in country X”, given there are around 200 countries in the world, it certainly implies there that country X is somewhat unusual in some regard. If you had claimed “in Sweden, cars have 4 wheels”, then I’d find it perfectly reasonable for someone to point out that it’s also the case in other countries.
> If you had claimed “in Sweden, cars have 4 wheels”
1. This is a dishonest comparison, because cars have 4 wheels by definition, while price labeling is very much differentiated across the globe.
2. Even if Sweden was one of only five countries in the world where cars have 4 wheels, saying "in Sweden, cars have 4 wheels" is still not the same thing as saying "Sweden is special, we have cars with four wheels, I bet no other countries do". The fact that you interpret it more as the latter says more about your own bias than what is stated in the text.
I’m being dishonest? It was an example to illustrate a simple point which has nothing to do with Sweden. Your 2nd point has absolutely nothing to do with anything I wrote and I’ve no idea how you inferred those claims unless you’re angry or upset.
Let me try one last time with an example. In this exchange, which party is being unreasonable; A: “in Switzerland, you have to pay for plastic bags in supermarkets”... B: “it’s the same in many other countries”... A: I NEVER CLAIMED SWITZERLAND WAS SPECIAL!!!
Again, you're characterizing me dishonestly, but at least this time you accurately described the situation. You're well aware that you changed the dialogue to make A sound unreasonable, instead of trying to understand why the point made by B could be understood as an unwarranted correction by A. I suggest we leave it at that because we will not agree.
I'm not being aggressive, I'm just frustrated because it seems to be impossible to point out that something is the case in the country where I live without one of the replies being in the spirit of "well, actually..." — so all I'm saying is that pointing out a phenomenon as geographically situated somewhere is not the same as pointing it out as unique to that location. I get this often enough that I expect it every time, so I'm sorry if some of the frustration shines through. There just seems to be a pathological tendency to correct people, to the extent where the errors are willfully interpreted as such.
I get why this frustrates you but as you can not change other people you could try to clarify by adding a "This might exist in other countries as well" or similar.
Interestingly, considering how passionately you’re defending the “in Sweden” part, shops very often circumvent this law by simply folding the piece of paper that displays the comparison price so it’s hidden.
This is extremely widespread, if not totally universal when it comes to really expensive items.
No-one ever seems to care or notice - I often unfold the paper so the price shows again, as it’s one of my pet peeves.
Wow. This is ridiculously derailing the general discussion, but I don’t know whether you can PM me an email address or something, but when I get back to Stockholm tomorrow I could photograph and send you any number of images showing this happening.
It does indicate both how blind Swedes are to the faults in their own country, and how passionately defensive they are though.
Edit: This doesn’t seem to me to be highly relevant to the general discussion on shrinkflation, but to avoid the very active downvotes I’ll post to imgur tomorrow evening (when back in town).
I merely presented anecdata contrary to your experience, that does not in any way indicate any kind of blindness to faults or mean I'm passionately defensive.
If you shop in stores that break the law you should take it up with the store manager, store owner, Stockholm's konsumentvägledare [0], or Konsumentverket [1]. They're violating the law [2]. I hope you had a nice vacation outside of Stockholm, no need to add an extra errand to your list when you're back in town.
Here in NL the stores often display the price per kg. I don't think there is a law but dutch people are just cheap, we feel like we get something extra for free out of it. (joking)
At least one supermarket forbids taking pictures tho.
Interesting, I haven't seen (or noticed) this. I'll try to keep an eye open for it, although I mostly shop in a rural area where I suspect is different from Stockholm.
In Australia the misleading part is what's actually weighed. The price per kg for canned beans doesn't help when 400g supermarket brand is 280g beans, 120g water. :(
But on average, with pretty much everything else, it works just fine.
I believe it's based on what the pack displays, if its grams then they show price per gram, if its ml, likewise.
I suppose its still possible to game with own label goods, from what I've observed it only seems to come up in a limited range of goods, sauces and suchlike.
I havent weighed a litre of oil, but a litre of water is a kg, so water based goods should be fairly comparable ml to g, that's the basis I work on anyway.
A lot of stores in Germany do something else, where they'll use the price per 100g for one brand and price per 1kg for another in order to make it just slightly harder to realize how expensive something is at a glance.
Nine states have mandatory unit pricing laws: Connecticut, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Oregon, Rhode Island, Vermont. Also DC.
I had no clue that was primarily a Northeast Corridor thing. I wonder if this stems from being the region that invented the price tag in the first place. [1] Curiously Pennsylvania (primary concentration of religious group that invented the price tag, the Quakers) doesn't make that list.
But in the US it is frequent that the price per weight (or per volume) is not displayed consistently in the same units, for example $/oz for some items versus $/lb, and it's much harder to do conversions than with the metric system.
> it also happens in the EU that one item will be shown as €/100g and another as €/kg
In my experience this difference is decided by what a "normal" amount of the good tends to be. For example, €/kg is usually used for meat, flour etc, but for something like spices or herbs a price of €/kg would seem silly since you rarely buy, and it's rarely sold in, a kilo. Still, a luxury of the metric system is that even if it's listed as €/100g, all you have to do is multiply by ten (aka move the decimal one step).
We have something similar in Australia. It really makes life a lot easier when shopping, because it means you don't need to do mental arithmetic whenever you are buying toilet paper (and when there are specials you usually find that non-discounted options are actually cheaper per-gram).
In The Netherlands they bypass this by having one of the item brands in 'price per subitem' and one in 'price per kg'.
So say you buy some chocolate. Both are in a 12 piece carton. Brand A will note €0,10 per piece whereas brand B will note €0,15 per 100g.
We have similar here in the USA. However, the unit aren't always the same. Usually, but not 100% of the time. Also, it's not clear to me if the per unit price reflects a sale price. For where I shop I don't think it does. They don't bother.
Finally, all well and good but best I can tell most ppl lack the basic math skills and/or desire to make an informed decision. This is why shelf space and ad budgets are still so popular with brands.
The similar per unit (usually per g, per kg, per ml) pricing is a recent addition in UK shops, only in the last 2-3 years as I recall.
So while Sweden had this as a national law w/o EU pushing it, I rather suspect the UK now having the same is due to Single Market harmonisation - i.e. an EU rule. That is what the SM does.
You're right, that always confused me when visiting the U.S. But yes, the price advertised is always the price you pay. This also goes for the deposit fee on bottles and other return items.
Chocolate bars used to have 200g. Some now have less than 100g. Toilet paper rolls used to have 50m; most now have 30m and some have only 10m.
This sort of thing started happening in the 1980s, because the government had frozen prices (that always works well). It became such a problem that now the law says that the packaging must clearly point out if the quantity inside has changed.
I'd also like to see a law passed that requires each product to mention on its packaging if its ingredients (even just their relative proportions) have changed. This would apply to things like foods/drinks and also cleaning products.
Of course companies would protest, claiming that their recipes are trade secrets, but we already require that products list their ingredients, and we protect trademarks for products, which seems unreasonable if companies can alter the contents of what is being protected, without telling customers.
To be clear, though, I'm not actually advocating that the labels report precise amounts of each ingredient, but they should be forced to say something like "40% more salt" or "70% more water", at least next to the ingredients, and "New recipe" on the front (as many products already do).
So you mean listing the change on already mandatory information.
Note that a lot can be told just looking at the label, but few people do it. For example quality meats tend to have more protein, quality diary products tend to to have more fat. High salt and sugar is usually a bad sign.
The order of ingredients is important too: greatest amount first. It means that if the thing they advertise in front of the package is way down the list, that's not good.
A friend of mine found a great example of this. She got a packaged snack item that consisted of some bread sticks and some yellow cheese or cheese-like dip.
The front of the package prominently declared "Made With Real Cheese!".
When she read the ingredients list, not only was cheese way down on the list--it was on the bread ingredients list, not the "cheese" dip ingredients list.
In the case of the strong flavors I mentioned, I think it's appropriate. They headline the label because that's what the food tastes like. It just doesn't take much peppermint oil to create a really strong flavor.
I would like to see some qr code pointing at an ever expanding list of data. I imagine a game where every 3 months 1% tax is added that can be waved if some new data set is exposed to the customer.
Its terrible how disconnected we are from the things that sustain us. There are so many companies involved in producing something simple. We can gradually expose the consumers to all these business processes we've accumulated over many thousands of years. I think it could be mind blowing in many ways.
People aslo behave different if someone might be looking. Investors get a tour of the facility and everything seems designed for them rather than for the customer. I've seen places remove chairs and force everyone to stand all day simply because it looked good to investors. Open floor plans anyone? From an investor perspective the less room for livestock the better. Salaries cant possibly be low enough. etc
Have them make [say] a nice video showing the production process. Have some fancy committee sign of on it. Or if the product is to embarrassed to show how it's made have it pay the 1% extra taxes.
Products diluted with water are hard to do, but I have no problem with government standardization of, say, the length of toilet paper on a roll. Maybe it doesn't even need to be a law but a tiny tax on nonstandard sizes (0.1%, enough to drive profit-seeking towards standards)
The irony is that one of the big reasons Brexit is even happening is because people in U.K. don’t like the fact that EU standardizes everything. They don’t seem to understand that this is being done to protect them from exactly this shrinkflation that is now going to be used by big companies to compensate for the negative results of Brexit.
They never signed up for being part of the EU. The UK joined the EC. Maybe they should stay in the EEA and everything would be fine, but even that has too many restrictive rules now that the English are unable to skirt. Like freedom of movement for goods and for people.
This is a Brexit lie based on a superficial change of name - the constitutional basis of the European Union is specified in the 1957 treaty of Rome and the later Maastricht treaty (https://en.m.wikipedia.org/wiki/Treaty_of_Rome). The treaty of Rome explicitly states that the goal is the creation of a single market for goods, labour, services, and capital. This was the foundation of the union that the UK voted to join by plebiscite in the 1970s. The UK - a representative democracy - also ratified the subsequent Maastricht Treaty by democratically elected parliament. The idea that the British people were somehow subjected to a “bait and switch” con job is simply a fabrication and demonstrates historical ignorance.
Yes the nature of the organisation has largely stayed the same, during its name changes: EEC -> EC -> EU. We joined a political union, which had goals at the time to create the SM, and a single currency.
However the UK did not vote to join in a plebiscite. We joined in 73, and had a referendum on leaving in 75.
I'd suggest that the issue in the UK was in part that the changed nature of our constitution after joining was never explained in schools (no Civics classes). Plus almost all discussion of it domestically tended to use the phrase "Common Market".
So we ended up creating a generation who were naturally eurosceptic, and were quite surprised by the changes post '94 once the EU emerged, and the single market reforms came in to existence.
Basically a lot of the people in that generation were not aware that we had joined a political union, with a level of law and government above that of the nation state. The generation before (who voted in '75) should have known that. The various institutions of state (government, civil service, courts, judges, etc) knew.
However that general ignorance existed (and still exists), it being reflected in our MPs, where a lot of them still (after 3 years of confusion) still do not understand the nature of their (and our) relationship with the EU.
> I'd also like to see a law passed that requires each product to mention on its packaging if its ingredients (even just their relative proportions) have changed. This would apply to things like foods/drinks and also cleaning products.
Ridiculous proposition.
Formulations change pretty much constantly for various reasons (ingredients become more expensive, or you change suppliers, or you decide to adjust something to make the product better or cheaper or both), and adding bureaucratic friction as well as packaging redesign is completely impractical. Packaging can take several weeks if not month to produce and you would have to constantly throw them away with this kind of rule. Wasteful.
As a consumer I rather like it when I know how much filler is added in my products
1. I want to be able to compare w other brands
2. I don’t want any filler at all!
If chocolate goes up in price, I’ll pay more to get the real stuff, or buy less of it. I most certainly won’t buy a bar of food wax with chocolate solids, or whatever Hershey is
> As a consumer I rather like it when I know how much filler is added in my products
Depends where you live but many brands actually indicate their content of chocolate directly on the box (70%, 80% etc... unless you buy milk chocolate.
As for not wanting any filler at all: then buy pure cocoa beans! If you buy processed food you should always assume there is some kind of "filler". And not that "fillers" are also necessary sometimes to give a proper texture to what you eat and make sure the taste is consistent from one box to another.
That's wrong in regard to food labels. If the formulation has changed in a way that makes those already printed labels inaccurate, they already have to throw them away to comply with Federal law and FDA rules.
All dane-pgp's proposed law would change is that when they change the labels to match the new formulation, which they must do, they would have to include a change date or a version number of something like that on the new label.
> All dane-pgp's proposed law would change is that when they change the labels to match the new formulation, which they must do, they would have to include a change date or a version number of something like that on the new label.
The proposal was a lot more aggressive than that -- dane-pgp specified that the packaging must mention if the ingredients stay the same but their relative proportions change. Under current law, there is no reason to alter the labeling for such a change[1], so you'd be seeing a huge requirement for new labels that weren't formerly required.
[1] Actually, there are two. First, you might switch up the relative proportions so much that the rank order of the absolute amounts changes, which would require reprinting the ingredients list. This is really unlikely.
Second, you might end up altering the Nutrition Facts information. That would also require relabeling. I don't know how likely that is; the Nutrition Facts panel is a pretty low-resolution instrument.
Ok, but what is your better suggestion to solve the problem of quality or content creep that affects consumers and economic data? Perhaps there is a good way to have consumers be informed, or perhaps there isn’t. But at the very least, accurate data for economic statistics should be available since that same kind of data is available at batch levels for safety and compliance purposes.
> now the law says that the packaging must clearly point out if the quantity inside has changed.
We need this law in the US. I’m not one to push for new regulations, but I have seen this happen time and again with big companies (Nabisco, General Mills) that shrink their boxes and count on the customer not to notice.
Consumerist (RIP) used to run a great series called the "grocery shrink ray" where they would call out these changes: https://consumerist.com/tag/shrink-ray/
Huh, I see most of the time in US price/oz is mentioned along with price of item. This greatly helps me decide if buying larger package could save me some money with having to do calculation myself, which I would have to do in my country.
Yea, this is something that's always impressed me about this US. In other countries, I have to pull up a calculator app on my phone, and calculate the price per kg for various packaging sizes, to figure out which one is the best deal. It's almost as though store labels in the US are designed with the discerning consumer in mind...
Don't be too impressed. We only have the price per unit listings, ingredient lists etc. as the result of bad business practices (and sometimes deaths) in the previous century. So it's not retailers or manufacturers responding to consumer demand... they're responding to government laws and regulation.
A contemporary example to hopefully convey the situation back then: if 'right to repair' becomes law at some point, this would also be due to consumer demand. Notice the level of interest companies have in addressing this consumer demand prior to legislation being passed...
Which other countries are you talking about? European countries are, afaik, required to show a comparison price. I'm more surprised there are developed countries that do not require it.
Yes, this is helpful for comparing two items on the shelf next to each other, and it is present in some stores. But there are only a few items that I actually remember the price/oz between visits. Mostly I remember only the price per package (if anything). For example, Triscuits and Wheat Thins are a good buy at $2/pack, and OK at $2.50/pack. But when they shrink the pack, I'm SOL because I have no idea what the price/oz equivalent is.
Maybe this is "my fault", but I'd guess that most consumers don't pay that much attention to the exact number of ounces (which are sometimes fractional) in the box.
I always look for price/weight or price/volume or price/count stickers but many retailers and items only list the price making you do the math.
Even then, I’m aware that many items have differences in content which game the price/measurement like a lower ingredient content (less cocoa per measurement and more fillers or water content).
There is not really a great way to combat these practices if you are not some kind of professional buyer that only purchases at wholesale scales.
On the other hand a lot of candy gets bigger and bigger. I am pretty sure the candy bars and ice cream scoops I got when I was a kid were half of the current size. Or even less.
I love to watch the shrinkage of ice cream. Over the past 10 years, the standard packaging of ice cream has gone from 1/2 gallon (1.9 L) to where they are currently at 1.4 L, with prices staying relatively the same.
(1) Recently I wanted a bag of sugar. At my closest grocery store, the bag was 4 pounds instead of 5. No problem: At my next stop at Sam's Club, I got two bags, 15 pounds each.
(2) Sometimes dish soap comes in small bottles. Okay, at Sam's get a gallon jug of their generic dish soap and with a funnel refill the small bottles. Same for glass cleaner, etc.
(3) Pizza can be $7 to $20. Okay. (i) In a 5 quart bowl, add 750 ml water and 1 T dry yeast. Let the yeast soften. Measure 1 kg of flour. Add 1 T salt to the water, stir, add 2/3rds of the flour, stir, add the rest of the flour, mix some, and dump on a floured board. By hand mix and knead for 8 minutes. Return to the bowl, cover, and let rise to fill the bowl. Dump on the board, form in a long loaf, cut into 8 equal pieces, place each each in a covered plastic bowl, refrigerate. Starting the next day for two weeks or so, for a pizza, take one of the dough pieces, in a microwave proof plate form in a circle 7-9" in diameter, and warm in microwave for 3 minutes. Add 3 T sauce, 1/4 C shredded Mozzarella, and maybe some pepperoni, sausage, etc., place in a clean steel pan, over medium heat, covered, for 13 minutes, move to a cutting board, slice, slide to a dinner plate, add 1 T of grated hard cheese, and eat. Get the flour, 25 pounds, at Sam's, and then the flour for one pizza is about 9 cents. With good toppings, the total cost is still about $1. So, anytime, in 20 minutes, 7 of effort and 13 waiting, get a pizza faster, better, and cheaper than frozen, carryout, or delivery.
As I wrote, I don't use an oven! Instead I finish the baking in a covered steel pan, and this does give a crisp bottom.
> match a commercial pizza oven.
"Match" in what sense? What I described is different but works great.
For the 20 minutes, even in Manhattan, tough to take the order, make and bake the pizza, slice it, box it, and deliver it, all in 20 minutes.
For the quality, that's a matter of taste, but frozen, carryout, and delivery don't use better ingredients.
Whatever strong opinions some people in Manhattan may have about pizza, for the world of pizza, Manhattan is a very tiny place. E.g., apparently all or nearly all Sam's Clubs scattered all across the US sell 5 pound bags of part skim, shredded, Mozzarella cheese, and no doubt nearly all of it goes for pizza: Pizza is all over the US and much of the rest of the world -- in comparison, Manhattan is a small thing!
By the way, for delivering a pizza quickly, there is a fundamental problem made fully clear in queuing theory: The orders have to arrive essentially as a Poisson process. But the pizza shop has only fixed capacity in pizzas made per minute. So, we have random demand fed to a fixed resource. Then the pizza shop has just two alternatives, (i) deliver quickly but have a lot of expensive time where the delivery people are doing nothing and (2) delivery slowly, from a queue, where the delivery people are busy but the customers have to wait.
I've wondered whether an unbaked pizza could be slotted in to a preheated pizza stone 'cage', slipped in to a heat sink type cooler for transportation, and bake while it's on its way to its destination. Assuming the details could be worked out, the customer would have hotter, fresher pizza, and the pizza shop could better match its resources to demand. Even if the tech could be worked out, it seems accident prone compared to the current situation.
As I read your parent's comment, my mind was drifting in the direction of your comment. Domino's is said to be working on such a thing, but more of warming rather than a cooking setup. The good pizza places I know use ovens that are ~500F. A couple issues: Is that feasible or safe in a vehicle? How about different distances to the delivery location resulting in overcooking/undercooking some pizzas?
I live a couple blocks from a pizza place. I order, wait 10 min, then turn on my oven, and then pick it up 10 min later.
I think you should use a quality pizza stone, but you were unfairly treated for espousing the idea that one would choose to use quality ingredients, rather than accepting some inferior product (or at least a relatively expensive product).
A pizza stone needs an oven, typically a quite hot oven, and some significantly long pre-heating. The stone gives a crisp bottom.
For the actual, final baking, I'm not using an oven and am using just a common, restaurant style, all steel saute pan with a circular flat bottom about 8" in diameter. So, I get the bottom of the pizza crisp and as brown as I want. And I cover the pan to create an oven that does cook the dough some more and melt the cheese.
All of this is my response to the OP about shrinkflation. I've outlined a response -- 20 minutes, 9 cents of flour, crisp bottom, sauce, cheese, and sausage of your choice, etc. My post is just in response to the OP's shrinkflation and not throwing down a gauntlet as the world's greatest pizza, better than NYC, Chicago, Naples, etc. For one, do some arithmetic on the 1 kg of flour, split 8 ways, and the 7" diameter -- get a relatively thick pizza, and people who want pizza very thin might not be happy.
> We need this law in the US. I’m not one to push for new regulations, but I have seen this happen time and again with big companies (Nabisco, General Mills) that shrink their boxes and count on the customer not to notice.
Except for fast-food companies, which we've been told have slyly been increasing their portion sizes and making us fat.
Also occurred in China after 2007. First it was just the usual inflation of the general level of price, the most obvious sign was the inflating price of food in supermarkets and meals in restaurants. However, as it progressed, the restaurant owners seemed to believe that, if they keep rising price, it would be extremely unpopular, so the prices kept roughly at the same level, but the amount of food in the dishes becomes smaller and smaller.
Sugars are heavily involved in inter cellular signaling we still do not understand at all. All sugars occur in nature within highly fibrous constituents. Fiber has been the helpful constituent on the side that helped with digestion of sugar, but when it isn't simultaneously present, it's a problem.
Toilet paper should be measured by volume, not length.
Both width and thickness of the sheets can vary. For both, larger is better. All three measurements interact together when forming a wad of paper. All three contribute to the size of the wad.
Walmart plays a heavy part in this game. They have such an outsized share of the market for Consumer Packaged Goods that they can bully manufacturers. When economics suggests the price of, say, some condiment needs to increase, Walmart simply refuses to accept the higher price. You can either lose your shelf space, or substitute a new, smaller, product format at the same price, which they will accept.
And so bottles of mustard get smaller, but stay $1.99 at Walmart. Kleenex boxes have 76 tissues instead of 88 but stay $0.99 at Walmart.
Next time someone tells you, "Well even the poorest of us today eats better than a king in the middle ages" think about this quality "inflation". What is the current cost today of putting high quality, wild meat on the table along with seasonally ripe and fresh fruit? What about high quality beer with no use of malt substitutes?
There are a number of measures, availability being one, where our modern food production system shines but on a quality measure it really falls flat against many times throughout history. The caveat there is obviously "history" is gigantic and runs the gamut from poor slaves eating gruel and starving to a patrician in Rome during its height or to a hunter gatherer in a food rich environment.
All that to say, I don't think this comparison is so simple, it is incredibly nuanced.
It will cost you a little bit more in time and money, but go to your local (legitimate) farmers market and you’ll have quality meat, fresh veggies and fruit, and your local microbrewery will serve a cold one with no malt substitutes for a tiny bit more.
Farmer's markets can be a good deal for what they sell but a lot brewpub is never to going to come close to the price of Budweiser or even more supermarket label beer. "A tiny bit more" here is $5 or $1.
And fast food is a much cheaper deal than if you cook veggies and organic burgers yourself - because quality does cost money.
>What is the current cost today of putting high quality, wild meat on the table along with seasonally ripe and fresh fruit? What about high quality beer with no use of malt substitutes?
Still easily within reach of anyone but the poor. Sounds like pretty standard yuppie organic restaurant material.
I would wager the average consumer today would be very disappointed in beer, meat and fruit from the middle ages (~500-1400 ad). There was no refrigeration, no hops (rare localized use of hops in beer started just at the end of middle ages), fruit hadn't been cultivated very far, etc.
This article is not as strong as the headline implies. The "models" being mentioned are supply/demand models of price-setting, not the general equilibrium models that inform policy.
The Bureau of Labour Statistics is already wise to the fact that products change over time, and they implement a quality adjustment factor (https://www.bls.gov/cpi/quality-adjustment/home.htm) to mostly compensate. Something simple like adjusting the quantity of stuff in the package is so blindingly obvious it should be fully accounted for in inflation statistics.
Instead, this article (and the research work it's based on) refers to the odd phenomenon of sticky market prices. In particular (from a bit past the easily-accessible blurb of the article):
> Firms that sell thousands of different items do not offer them at thousands of different prices, but rather slot them into a dozen or two price points.
This is not what you'd expect from a textbook model of economics; there's no continuous calculation that would explain why a company should prefer to sell a dozen different shirts for $14.99 despite differences in quality or observed demand.
The research also suggests the tail wags the dog:
> Retailers, Messrs Aparicio and Rigobon suggest, seem to design products to fit their preferred price points. Given a big enough shift in market conditions, such as an increase in labour costs, firms often redesign a product to fit the price rather than tweak the price.
... which is again counterintuitive given that retailers would ordinarily _set_ the price.
Ultimately, the macroeconomic point is made best at the conclusion of the article:
> What’s more, the substitution of quality for price as firms’ main way of responding to changing market conditions weakens the case for keeping inflation low and stable. Inflation makes relative prices less informative, economists reckon, making it harder to decide what to buy and how to spend. Rather than clarity, low inflation has brought a different sort of confusion: one of shrinking chocolate bars and lost holidays.
... which also makes sense given the research finding being reported on. Retailers evidently feel they can't adjust price to reflect quality (and have to go the other way); if inflation were higher but still stable, then everyone would be forced to make these sorts of adjustments more often.
The article seems to have missed the correct conclusion: we calculate inflation wrong.
If Toblerone gives you less chocolate for the same price, that doesn't mean some new thing called "shrinkflation" now exists, that means that chocolate became more expensive. But that new pricing doesn't seem to be properly hitting the inflation metrics.
I agree. I think also there's problems with how GDP is calculated.
If everyone who used spotify was paying 79p per track you would see massive economic growth in the music sector. However because it's an all inclusive streaming service not a huge amount more money is moving through it.
However as a consumer I am getting 1000x more music now than when I was 15yrs old. That doesn't seem to get recorded though.
So much stuff on the internet (like stack overflow or github) has gargantuan economic value but doesn't figure in GDP stats because it's mostly free.
> So much stuff on the internet (like stack overflow or github) has gargantuan economic value
I'm not so sure about that. Yes they are conduits to massive value, but that value is coming from us, not them. If they were to close down, equally good replacements would be (are) available immediately.
The value is still there though, today I have easier and better access to information, books, education, music, movies, games etc than the richest man alive 30 years ago. Back then people paid a lot of money to get information via physical media like huge encyclopedia sets, what we have today is both much better and much cheaper for everyone. But of course all of those books and cassettes were good for GDP while today's free services are not.
Haven’t read the article beyond the free teaser, but I wonder if an alternative explanation was that in previous decades competition strategies were strongly about adding to the amount of product: “10% more, for the same price!”
Now that the market consolidated and the losers have been driven out or bought out, the winners are quietly taking it back
So you measure inflation price per gram model fixed.
Current inflation models are also flawed in other ways as it changes goods exchange. Also if a measured market good is better price is adjusted.
Example larger tv size.
The shrinkflation problem in bulk retail CPI calculation comes from the way the the data is collected. They typically use GTIN numbers and those don't change when the quantity changes. You need to do additional work to correct for that.
Quality adjustment in CPI calculation is routinely done for many products using hedonic modeling. It's important in all rapidly advancing product categories like like TV's as you mention. For a product like a smartphone price difference between the replacement item and its predecessor is almost never pure price change. For example screen resolution change in smartphones induces quality adjustment to the price change.
At most grocery stores, the price per ounce is quoted beneath the overall item price. I realize reading glasses are expensive, but can the economists at the Bank of International Settlements and MIT not simply calculate inflation that way?
>The uncertainty principle If it happens on a sufficiently large scale, the practice of tweaking quality in lieu of price could play havoc with essential economic data. Statistical agencies do their best to account for changing product quality, but if adjustments are unexpectedly common or subtle then muted inflation figures could easily be concealing a more turbulent economic picture. Central banks watching for big swings in inflation or wage growth as a sign of trouble could be reacting to figures that bear far less relation to business conditions than they used to.
>What’s more, the substitution of quality for price as firms’ main way of responding to changing market conditions weakens the case for keeping inflation low and stable. Inflation makes relative prices less informative, economists reckon, making it harder to decide what to buy and how to spend. Rather than clarity, low inflation has brought a different sort of confusion: one of shrinking chocolate bars and lost holidays.
What has long been suspected by those outside the field, and rarely acknowledged by economists and statisticians inside the field. Consumer Price Index (CPI), a standard methodology of nearly every national bureau of statistics and economic measurement is susceptible to manipulation and gaming by producers and retailers because the statistical agencies employ limited resources to perform quality adjustments to the item price data.
The adjustment methodology is quite limited in what adjustments are made and the resources dedicated to comparing items and differences—there is no lab testing being performed and the most extensive research performed on some items is using product brochure data to make adjustments based on listed features at face value only (the brochure says this is better or comes with better features).
Often product data is limited so no adjustments are made, only assumptions like “we believe this product has the same quality or content” or “we will impute the missing price or data based on similarly available data or some kind of modeling abstraction.”
This standard methodology led by the U.S. BLS and other agencies has done a complete disservice to the reputability of economics as a hard science instead of a bureaucratic ideology.
Pretty sure you are being sarcastic or you are not all that experienced.
Talk at length with most economic professionals on /r/economics and you will find the repeatedly stated and unstated views that “the CPI is the most studied economic measurement in the world” and “you are welcome to perform your own study covering the inadequacies of the CPI.” I paraphrased slightly but from memory those quotes are highly accurate, as well as the general dismissiveness and institutionalism/bias pertaining to official economic data. Also for a professional economist to question the accuracy of official economic data is career suicide. Why you rarely see that topic discussed by a professional economist or in a published study.
I've seen this pattern in academic settings myself.
There's simply a lot of tunnel vision. Although, as a parent comment pointed out (a bit rudely) there's acknowledgement of various shortcomings of measures such as CPI, there's also a tendency to assume these models are accurate in policy-setting institutions.
I'd say they're maybe as accurate as predicting weather in the Great Lakes Region.
Also: r/economics should not be representative of economists, as a group. (Although they do parrot a lot of bank and government economist views.) Most posters there strike me as undergrads, who are mostly clueless to the fuzzy subtleties of the study (and life in general.)
If you want informed people on economics on reddit, go to r/badeconomics which is the more tightly knit hangout for professional economists and grad students.
Otherwise, go to the economics cluster on twitter. r/economics is like r/news with an econ twist. It's too large to effectively moderate.
r/badeconomics is great place to lurk for a layman who wants to learn.
The problem for layman like me interested in economics is that you have absorbed so much wrong views and explanations from the news and political commentary that you must work hard to unlearn them before you can start learning.
My experience is from bureau members and long time members I’m able to identify as professionals. I’m well aware of the population of undergrad and econ101 members that are fairly easy to identify as well.
If you know of any sources that are well known references that acknowledge the shortcomings of BLS methodologies I would be interested in reading up on them. I have not seen those kind of discussions frequently in publications.
“the CPI is the most studied economic measurement in the world” and it being fallible are not exclusive.
I had a great Econ 101 professor. He spend quite a few lectures breaking down how much these key stat suck. Then we spent the rest of the time using them for study because that’s what we have.
The key message he drilled into me was that 1) don’t be so certain of your results (or at least don’t sound like an asshole making pronouncements on things) 2) data are expensive to gather and there aren’t many alternatives; don’t ignore them because they have flaws
I agree, but generally the assumptions being made by authors and known issues with the data are unstated rather than stated. Further, when highlighting such issues, the reactions can often be negative and dismissive. Obviously people don’t like their work being criticized for reasons that they have little control over (it sucks but that’s the best data we have). My point is the topic doesn’t get discussed enough to improve—outside of some corners of academics.
Viewed from one bottom, the quality of toilet paper is of intense interest. Viewed across many bottoms it becomes less about how peachy soft the Charmian is and more about the effect in the balance of payments importing bumwad instead of making your own from local splinters in a pulp mill employing people.
CPI has to bridge both cheeks: it has to reflect what one person can relate to and what entire nations actually do.
And still, we need to have accurate pricing data (reflecting quality and content) if we want to make accurate macroeconomic decisions in a modern age where the historical understanding of inflation and full employment appears to be broken, among other concerns your bum and most bums could appreciate—like the immediate effects of technological change and automation pertaining to your job or UBI... that gives your bum a cozy chair to sit in.
My father told me about the "nickel bar" which was a popular chocolate bar that sold for, you guessed it, a nickel. The size of the bar would grow and shrink as the cost of chocolate varied.
Say supermarket bakery introduces new bread with seasame seeds only 25¢ more. Then slowly there is only new seasame seeds bread on shelves and regular bread becomes rare. Later seasame seeds is slowly dispearing from bread and voila - you have made regular bread 25¢ more expensive.
The other way is lowering quality of products. Inflation basket still contains basic bread, tomatoes and plain sausage. The problem is that the quality of these products tanked and to buy a bread of a quality of simple bread from 40 years ago you must shop in some premium, organic, hipsters bakery where it costs 10 times more then simple bread. Same goes for tomatoes and sausage.
And electric drills or washing maschines? Don't get me started. Today's Bosch electric drill lasts one building season, my fathers Bosch electric drill lasted 35 years. Price is the same or lower but you get way less for it.
But the inflation headline number stays low. And that matters as you can keep wages low (many pensions are inflation indexed). And as people used to say under communism -"Bread is more expensive but locomotives got cheaper".