Monday, December 26, 2005

Christmas postmortem: spending snapshot

My partner and I celebrated the Great Amurrican Consumption Holiday in an intentionally modest style.

Between us, we spent $663 on gifts, including those to each other. The total was probably (though not certainly) lower because she knitted some of them; I have included the cost of the yarn. Oddly, it is not easy to find a figure for average adult per capita Christmas gift spending in the United States. However, a figure of CAN$736 is frequently cited for Canada in 2004. That converts to $630 in US dollars -- so two of us barely exceeded that norm for one.

We also spent $70 on food for a couple of Christmas gatherings, including the feast in our parish after 11 p.m. Mass on the 24th. And each of us thought we could use some new clothes for the occasion to a total of $229. (She probably won't purchase in this category again until next Christmas; I am not quite so careful.)

The grand total for the holiday was $962 for two middle-aged, economically comfortable adults.

That figure strikes me as astronomically excessive, but I realize that I am mostly reacting to the dollar figure, not necessarily the value of the money. In order to think about this more, I created the chart above so as to think about what this much spending would have meant in previous times. Click on the image for a larger version.

I started with 1908, my mother's date of birth. If her parents had been celebrating a similar Christmas, they would have spent $48.10! By the time my partner's parents were born, that figure would have been up to $60.61. When my parents married in 1933, at the depths of the Great Depression, that figure had only risen to $64.45. However, by the time I was born, in 1947, World War II had kicked off some serious inflation. The same Christmas costs would have been $110.63. By 1970, currently often used by economists as a benchmark year for the dollar, the cost would have been $193.36. The Vietnam war had caused a lot more inflation. And from there, it has been up, up and away.

Inflation really took off after 1970; but real prices did not necessarily rise. I doubt very much that we could have gotten the quantity or even quality of clothing items we bought in the last few weeks for $46.03 in 1970. Some items may cost more, but cheap imports made by grossly underpaid labor keep U.S. real prices low.

I'm not sure what any of this means, except that it is interesting to add a time dimension to a snapshot of our spending. You can find the formulas for comparing the value of the dollar in various years here. (Excel file.)

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