Saturday, December 02, 2006

Christmas Price Index

A rather fun little bit of economics is PNC's Christmas Price Index. The Christmas Price Index has, for the past 22 years kept track of the cost of the Twelve Days of Christmas. The True Love gives a very diverse package of gifts -- from goods like a partridge in a pear tree to services like nine ladies dancing -- so it tends to mirror the actual trends of the economy better than you might think. This year the cost of the True Love's 364 gifts reached an all-time high of $75,122.03. With fuel costs (which play a major role in the price of the harder-to-find birds) levelling off, goods did not rise very much. However, services rose considerably, with only the maids a-milking, who receive minimum wage, not becoming more expensive. The partridge in the pear tree saw the greatest increase over last year, due to a surge in the price of pear trees (related to an increase in construction, which has increased demand for ornamental pear trees). While gold is more expensive this year than last, the price of gold rings was stable due, apparently, to jewellers absorbing the increased cost in the face of lower demand for luxury items.

The Christmas Price Index for this year is $18,920.59, a 3.1% increase over last year. The PNC website has all sorts of interactive charts and games for those who like to play around a bit with numbers. It's also a good way to introduce children to basic economic concepts.

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