Daily Archives: 21 December 2005

Hidden Inflation

The local Republican controlled radio station is touting
the low rate of inflation and points to this as proof that
Republicans know how to run the economy efficiently. Once I
stopped laughing and got up from rolling on the floor I
thought about what I call hidden inflation.

Hidden inflation is when you get less of a product or
service but pay the same price as before. The cost, per unit
of product increases, but the price you pay stays relatively
level. Hence, the price increase is hidden.

I recently saw what may be an example of this when we went
shopping for dog food. Dog food you say? Yes, dog food. We
went to the Longs Drugs (a very popular store here in Hawaii
that sells everything from sushi to slippers) to buy some dog
food for our grand dog. It seems little “Chica”, a
terrier-mix breed may have an allergy to some types of dog
food. We don’t know yet what she is allergic to so we decided
to try different brands of dog food and see her reaction to
each. But in reading the ingredients on the back of the cans,
we found this had very little relation to what the front of
the can said it contained. For example, if it said “Hearty
Beef” (all names are fictitious to protect the guilty) on the
front, the back label ingredients would say water, poultry
products, barley, rice, wheat, etc., followed somewhere by
“beef byproducts.” So we took a look at a can saying, on the
front, that it was “Lively Liver.” But the back label said
water, poultry products, barley, rice, wheat, etc., followed
somewhere by “liver.” In fact, every single can of dog food
we looked at, regardless of the brand or what the front of
the can said it contained, had the same major ingredients:
water, poultry products, barley, rice, wheat, etc.

Another example, SWMBO recently made up some goody bags
for Christmas. Part of what she included were some small bags
of candy. These small bags were part of a larger bag that
held about 20 of these smaller bags. She noticed that while
the price had not gone up much since last Christmas, the
number of smaller packets contained in the larger bag had
decreased and the weight of each smaller bag had also gone

A last example, some products have made the change from
the English measurement system to metric. But instead of
doing the math and just labeling it with the correct metric
equivalent to what was there before, they gave you less and
then listed that metric equivalent. Since most people don’t
carry calculator with them and don’t know the conversion
tables even if they did, it was a sneaky way to cover a cost

While I certainly haven’t taken any kind of scientific
survey of products, I get the feeling that there are many
other examples of products or services that have been reduced
but without lowering the price. This literally increases the
price per unit but hides the cost increase (or at least
attempts to hide the increase).

But the net effect is you pay more if you purchase the
same amount you used to get.