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Perhaps "frivolous" is the wrong word. But the effect he discribes in the linked article is a backwards pricing relationship between necessities (food, rent, ho

Perhaps "frivolous" is the wrong word. But the effect he discribes in the linked article is a backwards pricing relationship between necessities (food, rent, housing) and non-necessities (TVs, air-fryers, etc.). This is possibly an example of Giffen Goods in effect [1]. Where as the price of an inferior good increases (ex. bread), poorer families are forced to buy more of that product and forgo more expensive alternatives (ex. steak or TVs). Price change over 2022 [2] > Smartphones, 23.4% cheaper. > Televisions, 17.9% cheaper. > Bread, 16.2% more expensive. > Eggs, 59.6% more expensive. [1] https://en.wikipedia.org/wiki/Giffen_good https://en.wikipedia.org/wiki/Giffen_good [2] https://www.freightwaves.com/news/bizarro-inflation-is-making-random-stuff-cheap-and-necessities-unaffordable https://www.freightwaves.com/news/bizarro-inflation-is-makin...

jxramos 4y ago
I'd think that was a function of supply and demand to a large extent, people can forgo non-necessities and therefore the demand drops and the price follows that. For necessities not so much.
danans 4y ago
> But the effect he discribes in the linked article is a backwards pricing relationship between necessities (food, rent, housing) and non-necessities (TVs, air-fryers, etc.). That makes sense. But I also think there are simpler explanations, which is that smartphones and TVs are sectors where a lot of effort continues to go into automation and price reduction, and there are still lots of gains to be made there. Those products are also not fundamentally energy-input sensitive - if anything, newer production methods tend to use less energy than previous production methods. Food production is extremely sensitive to energy and fertilizer prices, which have also gone up significantly. You have to keep a chicken at a particular temperature, or it won't lay eggs. And also, food has just been very cheap for a long time, so it was already at high risk of price increases.
- renewiltord 4y ago
  TVs are cheaper because you can do targeted advertising against them. I worked on this stuff for a bit in its infancy. This increases margin sufficiently to drop prices on the device itself. It's a pretty huge improvement for QoL for most Americans.
  - AussieWog93 4y ago
    It's more than that. TV prices have been dropping like a brick for at least as long as I'd be alive.
    - renewiltord 4y ago
      True. I should have said that's accelerated it.

jxramos 4y ago

I'd think that was a function of supply and demand to a large extent, people can forgo non-necessities and therefore the demand drops and the price follows that. For necessities not so much.

danans 4y ago

> But the effect he discribes in the linked article is a backwards pricing relationship between necessities (food, rent, housing) and non-necessities (TVs, air-fryers, etc.). That makes sense. But I also think there are simpler explanations, which is that smartphones and TVs are sectors where a lot of effort continues to go into automation and price reduction, and there are still lots of gains to be made there. Those products are also not fundamentally energy-input sensitive - if anything, newer production methods tend to use less energy than previous production methods. Food production is extremely sensitive to energy and fertilizer prices, which have also gone up significantly. You have to keep a chicken at a particular temperature, or it won't lay eggs. And also, food has just been very cheap for a long time, so it was already at high risk of price increases.

renewiltord 4y ago
TVs are cheaper because you can do targeted advertising against them. I worked on this stuff for a bit in its infancy. This increases margin sufficiently to drop prices on the device itself. It's a pretty huge improvement for QoL for most Americans.
- AussieWog93 4y ago
  It's more than that. TV prices have been dropping like a brick for at least as long as I'd be alive.
  - renewiltord 4y ago
    True. I should have said that's accelerated it.