Recent Blog Posts
-
Smoking Lingerie Leads to Lawsuit
Nov 23 20093:11 pm EDT -
Oops
Nov 23 200912:01 am EDT -
The Era of the Renminbi Is at Hand
Nov 20 20092:55 pm EDT -
Computer Glitch Snarls Air Traffic
Nov 19 200910:29 am EDT -
Dollar Doldrums? What Dollar Doldrums?
Nov 19 20098:48 am EDT -
American Express Makes a Revolutionary Deal
Nov 18 200912:05 pm EDT -
Calpers Puts Pressure on Private Equity Funding and Fees
Nov 18 200910:27 am EDT -
Madoff Makes Millions (for Others)
Nov 18 20096:04 am EDT -
Lazard Looks Within Its Ranks for New Chief
Nov 17 20091:44 pm EDT -
A Brutal Morning for Geithner
Nov 17 20098:02 am EDT
Drinking and Driving and Inflation
Teenagers' tendency to drink and drive in the summertime has waned over the years, thanks to education and crackdowns.
Another factor this year is cost. Not only is gasoline hovering near $4 a gallon around the country, but beer prices, pressured by rising costs of hops and barley, are up more 4 percent from a year ago.
Still the surge in prices at the pump -- up nearly 40 percent this year -- has clearly outpaced beer inflation.
Mark Thoma, an economist at the University of Oregon, has mused on the trade-off between buying gas and buying beer:
"If someone had an allowance of $5 per week back then and purchased two six-packs and 10 gallons of gas, then they would need $51 to purchase the same basket of goods (or bads) today. Since this was 36 years ago, that works out to inflation of 6.7 percent per year."
But the inflation rate for just gasoline works out to 8 percent since 1972. The teenager "who spent all $5 on beer and didn't drive at all, would only need $22 today to get the same amount of beer. That's an inflation rate of 4.1 percent."
"Given the shift in relative prices, kids today should be tempted to drink more, and drive less."
by Jeffrey Cane






