Hot cross buns … a lesson on pricing

Over on his blog, Bill Bennett has been discussing hot cross bun inflation over the last couple of hundred years – saying that it has averaged about 1.1%pa.

With the consumption of hot cross buns about to spike, I thought I would copy and paste my comments on hot cross bun pricing over here:

One thing I’d note though is that the increase in the price level more generally only really got kicking off during the last 50 or so years. As a result, if hot cross buns had just been generally following inflation overall, the 1.1%pa figure could be a bit misleading.

Another point when looking at hot cross buns – we need to ask what the price of these buns has done relative to all other goods and services. Over the past 200 and a bit years we have seen the relative price of inputs fall for hot cross buns, but we have also seen incomes rise – and given that hot cross buns are a “normal good” it is ambiguous whether hot cross bun inflation has exceeded inflation in goods and in prices.

A final point, a hot cross bun in 1798 would have tasted and felt different than a current hot cross bun – any changes in the quality of said bun should be taken into account.

These are all points to keep in mind when looking at changes in the price of any good or service.

1 reply
  1. elise
    elise says:

    as well as getting more expensive this year hot cross buns from bakeries and super markets were tiny in comparison to previous years! with considerably less raisins! though it may seem a menial topic, when they continue to raise prices of luxuries that only come around for that brief period once a year it causes one to stop and think, there will eventually be a time when these delicious baked goods will be priced out of our reach all together, reserved for only the noble men and aristocrats held in the highest esteem! If anyone feels the need to continue with this please feel free to look into the forum topics on 🙂 

Comments are closed.