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imageHow has the price of that prototypical prom item, the corsage, changed? Corsage prom via www.shutterstock.com

Prom season is now upon us, the key social event of most people’s high school experience. My youngest child is preparing to attend her first senior prom and a steady supply of fancy dresses has begun to appear in our house. As my credit card bills climbed ever higher, I began to wonder, how has the price of the prom changed over time?

For teenagers scraping together money from minimum wage jobs and informal work like baby sitting and snow shoveling, the question has immediate relevance because the price determines if they can afford to go. For parents of teens, the question is relevant because the prom is another expensive bill competing with lots of other financial priorities.

Even for people not directly connected to the high school experience, the price of the prom is important. The US is a melting pot of different cultures, religions and ethnic groups. Tying these disparate groups together is a variety of common shared experiences, such as celebrating the 4th of July, eating turkey at Thanksgiving and, for teens, experiencing the prom.

When the prom’s price goes down, more teens can afford to go, and it becomes a more inclusive shared experience. When the price rises, however, the prom becomes a more exclusive social event attended mostly by those with wealthier parents, resulting in fewer common shared experiences.

Cereal and donuts

It is possible to get a sense of the changing price of going to the prom using government data. The Bureau of Labor Statistics provides detailed monthly information on the trend in prices over time for a vast number of items purchased by the typical family.

The government does not care, directly, about the price of the prom – unfortunately it has yet to craft a “prom index.” However, using a subset of the inflation data we can see that proms are actually getting relatively cheaper over time.

The typical 17-year-old going to the prom this year was born in 1998. Since then, the Consumer Price Index, or CPI, has increased 45%. That means the average item a family bought for $1 in 1998 now costs $1.45. Each month the CPI releases hundreds of detailed price indexes so that anyone can see, for example, if the price of breakfast cereal is rising faster than, say, donuts over time.

The Prom Price Index

Though the US government has yet to to see the value, I created my own Prom Price Index from ten of the CPI’s components. Details on creating price indexes are found in Chapter 6 here.

The CPI directly tracks the price change for many items common to a typical night at the prom, such as “women’s dresses,” “women’s shoes,” “men’s suits,” “men’s shoes,” “photographer fees,” “haircuts and other personal services like manicures” and “beer,” which covers the age-old tradition of sneaking in a drink when the adult chaperones are not looking.

The CPI does not specifically cover limousine rentals, corsages, boutonnières and bouquets but does track “car rentals” and “indoor flowers,” which are pretty close categories. The hardest one to match is the price of prom tickets, which for many attendees is only a small part of the total cost. The closest category the government provides is “full service meals,” even though from the stories I heard from my children, almost no prom attendees actually spend much time eating.

The slow pace of prom inflation

Astonishingly, the vast majority of prom items rose at a slower rate than general consumer prices, and some actually fell.

A man’s suit, for example, cost 16% less in March than it did back in 1998. While a pair of women’s shoes has gone up only 6% – compared with the CPI’s gain of 45%.

Of the ten categories I included in the Prom Price Index, seven either went down or went up at a slower rate than general consumer prices (flowers, men’s suits, men’s shoes, women’s dresses, women’s shoes, car rental and photographer fees).

Two categories went up at roughly the same rate as overall prices (beer and haircuts and personal services like manicures). Only one category, full-service meals (intended to track the price of a prom ticket), went up faster than overall prices, rising 56%.

Combining these ten categories — based on roughly what my child and friends spent money on last year and this year — showed that, from the time they were born until today, the price of going to the prom went up by 22%, which is about half of the 45% increase seen in overall prices. Readers who want to calculate the change using the amount of money they or their teenager spent can download an Excel spreadsheet here.

Below is a graph starting in 1998 that shows how $100 spent on items in the general consumer price index (CPI) and the subset Prom Price Index has increased. While the dotted line tracking the general CPI steadily marches upward, the solid line denoting prom prices does not start going up until 2005.

imageThe Prom Price Index shows that the cost of attending the prom has increased at half the pace of overall consumer prices.Jay Zagorsky/Bureau of Labor Statistics, Author provided

The change in the CPI is a good indicator of how the price of something has changed over time. This means a high school senior attending prom this year will spend half as much as the pace of inflation would suggest, resulting in savings of 16 cents on the dollar – compared with what the price should be. Of course, that’s only factoring in typical prom paraphernalia, not any novel ways teens are expected to spend money for the big night.

Either way, this should be good news for seniors and parents covering the costs.

Understanding the changing price of proms is important not only for the memories invoked years after the event is over, but also because it is a quintessential American experience. Proms will never be cheap, but it is nice to know that over time the inflation-adjusted cost of attending this rite of passage is falling, enabling more teenagers to attend.

Jay L Zagorsky does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.

Authors: The Conversation

Read more http://theconversation.com/omg-proms-are-actually-getting-cheaper-compared-with-the-price-of-everything-else-40680

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