Comment by plemer
18 hours ago
That may be the point. Simple inflation adjustment gives us x but the real price is more or less than x. Why is that?
18 hours ago
That may be the point. Simple inflation adjustment gives us x but the real price is more or less than x. Why is that?
> Simple inflation adjustment gives us x but the real price is more or less than x. Why is that?
Restaurant economics are a function of ingredient costs and labour. I suspect ingredient costs are close to OP's estimated multiples. But real wages are way up since the 1950s. Anything with a large labour component of costs will have tended to rise faster than inflation, which is an average of goods and services.
(There are specialised metrics if you actually wanted to dig into this question.)
Are you saying the prices listed were just for the ingredients and not the actual cost to the person ordering? They mentioned they saw the price in a photo which suggest it is what the person would be charged. I get that labor costs would cause an increase of raw ingredient price comparisons for total prices. But if you could pay buy a burger for a nickel but now need $10, there is a definite issue in just a "simple" adjustment that suggests you'd only need $5. If the numbers are that far off because the simple needs to be more advanced, what's the point of the simple numbers? Bad data is worse than no data.
> Are you saying the prices listed were just for the ingredients and not the actual cost to the person ordering?
Sorry, no. I'm saying labour is probably a larger fraction of the burger's costs today than it was in the 1950s. (I'd naively guess profits are, too.)
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Inflation is a measure of change in overall purchasing power.
What a specific purchase costs is highly dependant on the inputs, the cost of its labour (which might grow faster or slower than the average wage), and a lot of other factors.
Food is way more expensive today than it was 50 years ago. Airplane tickets are way cheaper. Everyone has a cellphone now, and middle class families have multiple cars, but a trip to the doctor will mean that ~15% of the population will be on the verge of not paying their bills. On the other hand, I have access to ~every major piece of music ever made for ~$15/month, so that's something.