This post is more to bring up an article that is fun to look at, but is also somehow relevant to the issue of percieved vs calculated inflation that Domenico brought up.
Since 1984 PNC (a US financial consulting company) has calculated the Christmas Price Index and checked how much this differs from the Consummer Price Index. The Christmas Price Index is calculated summing up the values of the items quoted in the Twelve Days fo Christmas, a Christmas Carol. The items are (in brackets price in 2007 and 2006):
1. Partridge ($15 / Same) and Pear Tree ($150 / $130)
2. Two Turtle Doves ($40 / Same)
3. Three French Hens ($45 / Same)
4. Four Calling Birds - canaries ($600 / $480)
5. Five Gold Rings ($395 / $325)
6. Six Geese a-Laying ($360 / $300)
7. Seven Swans a-Swimming ($4,200 / Same)
8. Eight Maids a-Milking ($47 / $41)
9. Nine Ladies Dancing - per performance ($4,759 / Same)
10. Ten Lords a-Leaping - per performance ($4,285 / $4,160)
11. Eleven Pipers Piping - per performance ($2,213 / $2,124)
12. Twelve Drummers Drumming - per performance ($2,398 / $2,301)
If you look at the prices, one of the worst price increases is that of food (geese, and milking maids, meaning that milk prices would go up too), which makes me think that even if prices overall may not grow that much (turtles, partridge, swans are still the same), what matters for percieved inflation is that the things you buy actually become more exensive. When at ballaro' they show families that have a hard time getting to the end of the month, I think that is mostly because it is true that prices for food and other essential commodities have gone up.
For whoever is rich enough to be able to afford the presents from the 12 days of Christmas, I guess an overall increase from $75,122 to $78,100 (4%) is not as bad as for someone who needs to buy more essential commodities.
Info from:
msnbc
PNC Christmas Price Index
The Carol on youtube (best version I could find...).
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In the articles suggested by Davide (ISAE articles..look at the comment of Davide on my first post) I have red that in the Inflation rate, comuputed by ISTAT, there is a big problem: NOT ALL THE HOUSEHOLDS ARE EQUALLY WEIGHTED, HOUSEHOLDS WITH AN HIGHER VOLUME OF EXPENDITURE ARE MUCH WEIGHTED THAN THE OTHERS!!! This means that households with a greater income are much weighted than the others, i.e. the biggest share of the population (the lower-medium class). I think this is one of the reasons why inflation rate computed by ISTAT was lower than the perceived one during the changeover (lire-euro).
Elisa, you are right: there are also some psycological factors as what you have said, people perception is much high for the goods consumed frequently (like primary goods)!!
Let's hope to have a good and cheap christmas!!
Bye
Domenico
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