It's Christmas season once again so let's take a look at the annual Christmas Price Index as computed by economists at PNC Wealth Management of Pittsburgh, Pa. This index tracks the prices of the set of twelve gifts in the song, "The Twelve Days of Christmas."
The total cost of the set of twelve items in the song is $21,465, an increase of $385 over 2008. This is a 1.8 percent increase compared to a 1.5 percent decline in the more familiar consumer price index.
The price of the Five Golden Rings increased by 42.9 percent. This is due to the high price of gold, which varies inversely with the value of the U.S. dollar.
The price of the Three French Hens increased by 50 percent over 2008. But you can still purchase them for a mere $45, a minuscule part of the total gift package. A price index is influenced by the relative weight of each item in the index. Since the Three French Hens are such a small part of the total gift package, their price could double or triple with little effect on the total package that exceeds $21,400.
The Two Turtle Doves increased in price by 1.8 percent, for a total cost of $56. The price of the Partridge fell by 50 percent to a mere $10. The price of the accompanying Pear Tree also fell by 25 percent, but adds $150 to the combined Partridge in a Pear Tree.
The price of the Four Calling Birds was unchanged at $600. The price of the Six Geese-a-Laying declined by 37.5 percent and can be yours for $150. The Seven Swans-a-Swimming is one of the two priciest items in the set. Although decreasing by 6.3 percent, they will set you back by $5,250.
In contrast to 2008 when the price of gold was down, the economy-minded gifter in 2009 is well advised to avoid gold and reconsider the birds. The modestly priced Two Turtle Doves or Three French Hens are particularly attractive. All five of these birds will keep gift costs to around $101.
The True Love gifter with a little more loose change might consider going upscale with the partridge in a pear tree for $160, particularly if his true Love likes gardening. The Pear Tree has the added feature of bearing fruit, a nod to those who like canning.
The practically minded would find the Six Geese-a-Laying for $150 to be attractive, as the eggs would provide his true love with a future stream of income. Recession places a premium on practicality to all but the most profligate.
As with many enterprises, the cost of human services is a major budget item. The exception is the Eight Maids-a-Milking whose services can be purchased for a mere $58. Since 1997, their compensation remained flat, until 2008 when an increase in the minimum wage provided them with a well-deserved increase to $6.55 per hour, and in 2009, an increase to $7.25 per hour. Their cost remains a minuscule part of the total gift package. But as dairy operations in this neck of the woods are largely mechanized, the Maids-a-Milking might be well served to seek alternative employment.
The highly skilled dancers and musicians are in a better place. But in recession, it was only the Nine Ladies Dancing who received a pay increase - 15 percent for total compensation of $5,473 - either strong union negotiations or compensation for past gender discrimination.
The Ten Lords-a-Leaping ($4,413), Eleven Pipers Piping ($2,285), and Twelve Drummers Drumming ($2,475) received no increase in compensation, presumably due to lack of alternative employment. Their bargaining power is weak in a soft labor market. They are doubtlessly content to be employed, especially at work involving no heavy lifting.
The Christmas Price Index illustrates the importance of weights assigned to items in an index. The 1.8 percent increase represents the increase in cost of the set of twelve items in the song. But recall that all gifts except the Twelve Drummers Drumming are given repetitively - the Partridge in a Pear Tree for twelve days, the Two Turtle Doves for eleven days, etc. This generates a mathematical series of (1x12) + (2x11) +
(3x10) +........+ (11x2) + (12x1) = 364 items over the twelve days.
The total cost of these 364 items is $87,403, for a .9 percent increase over 2008. Why is this less than the 1.8 percent increase for the set of twelve? Recall that the price of the Pear Tree and many of the birds declined, the price of the Geese-a-Laying decreased significantly, and the pricey Swans-a-Swimming decreased as well. These items are given more repetitively over the twelve days than the dancers and musicians, whose prices remained stable. Hence, even though the birds and the Pear Tree have small weight in the set of twelve gifts, by repeatedly counting them, they now carry more weight in the index. This, along with the price decrease of the Swans-a-Swimming - one of the costliest items in the index - is enough to drag down the index for the set of 364 items relative to the index for the set of twelve.
Selecting gifts can be complex enough without burdening your true love with the prospect of accommodating a menagerie of birds, dancers, and performers. It's simpler to purchase a gift certificate from any of our many regional merchants or fine eateries.
With that, let me thank Times Editor Jeff Rogers for publishing this scribbling over the last four years, and let us wish him well on the next step in his career path at Sterling, Illinois.
And I thank my readers for your encouragement and support. We scribes thrive on that. If you see me wandering the streets or having a beer at one of our local taverns, please introduce yourself and let me know who you are.
Merry Christmas, happy new year, and may it be more prosperous than last.
- Monroe resident and native John Waelti is former Professor of Applied Economics, University of Minnesota; and former Head, Department of Agricultural Economics, New Mexico State University. He can be reached at jjwaelti1@tds.net.
The total cost of the set of twelve items in the song is $21,465, an increase of $385 over 2008. This is a 1.8 percent increase compared to a 1.5 percent decline in the more familiar consumer price index.
The price of the Five Golden Rings increased by 42.9 percent. This is due to the high price of gold, which varies inversely with the value of the U.S. dollar.
The price of the Three French Hens increased by 50 percent over 2008. But you can still purchase them for a mere $45, a minuscule part of the total gift package. A price index is influenced by the relative weight of each item in the index. Since the Three French Hens are such a small part of the total gift package, their price could double or triple with little effect on the total package that exceeds $21,400.
The Two Turtle Doves increased in price by 1.8 percent, for a total cost of $56. The price of the Partridge fell by 50 percent to a mere $10. The price of the accompanying Pear Tree also fell by 25 percent, but adds $150 to the combined Partridge in a Pear Tree.
The price of the Four Calling Birds was unchanged at $600. The price of the Six Geese-a-Laying declined by 37.5 percent and can be yours for $150. The Seven Swans-a-Swimming is one of the two priciest items in the set. Although decreasing by 6.3 percent, they will set you back by $5,250.
In contrast to 2008 when the price of gold was down, the economy-minded gifter in 2009 is well advised to avoid gold and reconsider the birds. The modestly priced Two Turtle Doves or Three French Hens are particularly attractive. All five of these birds will keep gift costs to around $101.
The True Love gifter with a little more loose change might consider going upscale with the partridge in a pear tree for $160, particularly if his true Love likes gardening. The Pear Tree has the added feature of bearing fruit, a nod to those who like canning.
The practically minded would find the Six Geese-a-Laying for $150 to be attractive, as the eggs would provide his true love with a future stream of income. Recession places a premium on practicality to all but the most profligate.
As with many enterprises, the cost of human services is a major budget item. The exception is the Eight Maids-a-Milking whose services can be purchased for a mere $58. Since 1997, their compensation remained flat, until 2008 when an increase in the minimum wage provided them with a well-deserved increase to $6.55 per hour, and in 2009, an increase to $7.25 per hour. Their cost remains a minuscule part of the total gift package. But as dairy operations in this neck of the woods are largely mechanized, the Maids-a-Milking might be well served to seek alternative employment.
The highly skilled dancers and musicians are in a better place. But in recession, it was only the Nine Ladies Dancing who received a pay increase - 15 percent for total compensation of $5,473 - either strong union negotiations or compensation for past gender discrimination.
The Ten Lords-a-Leaping ($4,413), Eleven Pipers Piping ($2,285), and Twelve Drummers Drumming ($2,475) received no increase in compensation, presumably due to lack of alternative employment. Their bargaining power is weak in a soft labor market. They are doubtlessly content to be employed, especially at work involving no heavy lifting.
The Christmas Price Index illustrates the importance of weights assigned to items in an index. The 1.8 percent increase represents the increase in cost of the set of twelve items in the song. But recall that all gifts except the Twelve Drummers Drumming are given repetitively - the Partridge in a Pear Tree for twelve days, the Two Turtle Doves for eleven days, etc. This generates a mathematical series of (1x12) + (2x11) +
(3x10) +........+ (11x2) + (12x1) = 364 items over the twelve days.
The total cost of these 364 items is $87,403, for a .9 percent increase over 2008. Why is this less than the 1.8 percent increase for the set of twelve? Recall that the price of the Pear Tree and many of the birds declined, the price of the Geese-a-Laying decreased significantly, and the pricey Swans-a-Swimming decreased as well. These items are given more repetitively over the twelve days than the dancers and musicians, whose prices remained stable. Hence, even though the birds and the Pear Tree have small weight in the set of twelve gifts, by repeatedly counting them, they now carry more weight in the index. This, along with the price decrease of the Swans-a-Swimming - one of the costliest items in the index - is enough to drag down the index for the set of 364 items relative to the index for the set of twelve.
Selecting gifts can be complex enough without burdening your true love with the prospect of accommodating a menagerie of birds, dancers, and performers. It's simpler to purchase a gift certificate from any of our many regional merchants or fine eateries.
With that, let me thank Times Editor Jeff Rogers for publishing this scribbling over the last four years, and let us wish him well on the next step in his career path at Sterling, Illinois.
And I thank my readers for your encouragement and support. We scribes thrive on that. If you see me wandering the streets or having a beer at one of our local taverns, please introduce yourself and let me know who you are.
Merry Christmas, happy new year, and may it be more prosperous than last.
- Monroe resident and native John Waelti is former Professor of Applied Economics, University of Minnesota; and former Head, Department of Agricultural Economics, New Mexico State University. He can be reached at jjwaelti1@tds.net.
