Wednesday, September 10, 2008

Elasticity

Going along with our Presidential economy talk, I want to point out an interesting phenomenon in our economy right now.

A lot of times when inflation runs up prices as fast as they are right now, we can find out what goods have an inelastic demand - basically, we can see what kinds of goods people will buy regardless of how broke they are.

While Americans are driving less, buying fewer clothes, eating out less, and buying more generic brand, there is one thing they will not go without.

Beer.

Apparently, guilty pleasures are the last thing to go during tough times. While shopping, gambling, eating, and smoking have all taken downturns, beer sales really haven't been affected.

Note to Self: I would think during times like these, the beer market would actually grow. It's pretty much the cheapest of the alcohols, unless you can stomach cheap liquor. We all need an escape when times suck...

8 comments:

SarahM said...

actually- Bars do the best business in an economic resession. people with no jobs and a cranky, hungry family at home tend to drown that in some cheap beers.

teeni said...

Wow. This is interesting. I admit I haven't thought much about that but it does make a lot of sense. It's kind of depressing though.

K Trainor said...

Yes, but how are pot sales holding up? Ask your cop so we have a good comparison.

Also--I think I overfed your fish. Very sorry.

colbymarshall said...

If only we had a car that would run on BEER...all problems might be solved if you could run your car and drink from the same container. That's what I call cost effective.

the Grit said...

Hi MJ,

Not to rain on the parade, but just what sucks about the times we live in? You, by the way, aren't the only source I've heard this line from, as the liberals have been spouting it high and low for years now in preparation for the next elections.

Still, I don't understand how anyone buys into it. Really, while gas prices may have gone up a bit since Pelosi and Reid started running Congress, I just got cable modem service for $40 a month. Heck, 10 years ago the equivalent service would have cost $400 a month, if I could have gotten it at all. The same goes for cell phones. There's no way I would have shelled out for one back then, but the one I have now is not all that expensive, has a digital camera, records video clips, responds to voice commands, uses GPS to tell the rescue people where I am if I happen to roll my tractor off away from the road, and has Internet access. If things continue along the same rosy path, my next wireless communication device will do all that, read my mind so I don't actually have to bother speaking, administer therapeutic massage, and do my laundry. For that matter, I would also point out that several of the cancer varieties which my inexplicably increasing age makes me more likely to be afflicted by now have treatments with excellent survival rates which weren't available 10 years ago.

Of course, there is that crap where every automated service asks you if you speak English. Maybe that's the source of the problem.

the Grit

Matt said...

When the world ends everyone will be at one of two places.

In church or at the bar.

MJ said...

SM - I'm not surprised.

Teeni - It is a little depressing. But who can be depressed when they're buzzed!

K - Hmmm. Good point. I'll have to check into that. Don't worry, my fish still look good and perky this morning, if not a little fatter.

CM - What a good idea! But wasn't that the case with ethanol?

Grit - You have a good point, albeit long. For many like me, however, most of the things you mentioned aren't as vital as things like groceries. The problem is for people (again like me) whose salaries haven't been raised to meet with the inflated prices. Some of us are barely getting by. Luckily, I do budget in some good health insurance and can buy a burger once a week. While we do live in a nice, cheap technology world, my personal world is not so much affected by personal technology prices as it is by the price of paper and bread. So I raise a glass to forget about it.

Matt - I'll be at church... with a shot of vodka in one hand and a Bible in the other!

the Grit said...

Hi MJ,

Sorry, I tend to get long winded when drinking :)

Still, I was just pointing out the bright side of life, which keeps me from eating a bullet. For instance, on food prices, sure they've gone up a bit, ah, a lot, but at least around here there's much more variety on the shelves. Besides, considering the constant barrage I get from TV and the print media on how over weight Americans are, it wouldn't surprise me at all if the high food prices weren't the result of some secret Government plot to starve us into being healthy against our will.

As background, my parents and other relatives lived through the Great Depression and WWII and, after growing up with their tales of truly bad times, having a roof over my head and a 12 pack of Ramen Noodles in the pantry makes me giddy as a school girl, so to speak. Throw in a bottle of Scotch and a box of cheap cigars, and life is fine.

We should start a blog devoted to discussing this sort of thing.

the Grit