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PURDUE ECONOMIST JAYSON LUSK DEBUNKS REPORT OF PRICIEST THANKSGIVING DINNER ON ITS WAY
Oct. 28, 2021
By Dr. Jayson Lusk, Professor of Ag Economics, Purdue University
A couple days ago, I was asked by a reporter whether I thought this year would be the most expensive thanksgiving ever. I sidestepped the question because I didn't think it was very serious. Today, I see headline after headline after headline is asking the same question or making the claim that 2021 will be the priciest Thanksgiving.
Is it true?
One can certainly look at food prices over time. The figure below shows data from the Bureau of Labor Statistics showing the percent change in prices of food for at home consumption relative to January 1980. In September 2021, the price of food at home is 210% higher than in January 1980. By, this measure we are indeed on pace for the priciest Thanksgiving ever. But, look at the graph. Wouldn't that statement be true each and every Thanksgiving since 1980? Because of inflation, prices tend to inch upward every year. Thus, looking only at changes in the price of food over a long period time doesn't really tell us much about whether food is more expensive.
What we want to know is whether food prices are rising at a faster rate than other items that we might care about. One key economic variable many households care a lot about is their income. Income and wages also increase over time because of inflation. But, by comparing prices to income, we can get a sense of whether food items are, in fact, more expensive for a worker.
To explore this issue, I pulled data from the Bureau of Labor Statistics (BLS) on median weekly earnings for people employed full time going back to 1980. I also pulled average price data from the BLS for selected food items that have been reported on a fairly regular basis since 1980. Assuming people work an average of 2,400 minutes a week (40 hours a week * 60 minutes per hour), I calculate the amount of work time it takes to earn enough money to buy selected food items today compared to 1980. To my liking this is a much better measure of whether food is, in fact, more expensive.
To view the complete report, click here.
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