3 ms·
Very interesting story. I'm also surprised by the $18,000 asking price. Seems cheap even with inflation.
by moonka 9y ago
Very interesting story. I'm also surprised by the $18,000 asking price. Seems cheap even with inflation.
- graeme 9y ago> I'm also surprised by the $18,000 asking price. Seems cheap even with inflation. It does seem low. Of course, it was a maggot infested bar, not up to code, before the era of urban renewal. Also has to account for average income growth, not just inflation: due to Baumol's cost disease, no one would run bars if they only paid as much as they did in 1976, based on 1976 wages. Non-labour productive stuff like bars has gotten more expensive generally I believe.
- ThrustVectoring 9y agoInterest rates (and thus, discount rates) were significantly higher back then. If you can get 5% a year with short-term treasuries, you're not going to pay as much for the free cash flow from buying a bar.
- gwbas1c 9y agoIt's $72,448 in today's dollars. https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=18%2C000&year1=197707&year2=201708 https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=18%2C000&year1... I suspect the business itself had issues and the owner just wanted out.