Tags: ham | Christmas | meal | price

Traditional Christmas Meal Could Teach Economists Something This Year

By    |   Friday, 21 Nov 2014 08:10 AM

Many families have enjoyed a ham dinner on Christmas Day for generations. This year, that ham dinner will be a test of economic theory.

Ham prices are up 13.9 percent from a year ago, according to the latest data from the Bureau of Labor Statistics. Meat prices are generally higher in the inflation data, with beef being up even more than ham.

Holiday meals will be significantly more expensive if families stick with tradition. They might instead decide to reduce the amount of leftovers and buy a smaller ham. Or they might substitute lamb, which is less expensive this year than last year, or other meats for the meal.

Holiday hams demonstrate that consumers will make choices when they have to. If the price is too high, consumers will substitute or cut back in some way. Consumers have limited resources and must react to price changes.

This applies to all prices — if health insurance takes a larger share of income, consumers will cut back on something else.

For Christmas dinner, many consumers will be able to stick with their traditional ham because they are spending less money on gas to get to and from work. The drop in gas prices could allow consumers to spend more for the holidays, a welcome change for consumers who have seen wages stagnate for years while gas prices rose.

Tradeoffs are a part of consumer behavior, as long as tradeoffs are allowed to occur. Each new government mandate decreases the financial flexibility of many families and hams may one day be too expensive for families paying for expensive and inadequate health insurance.

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MichaelCarr
Many families have enjoyed a ham dinner on Christmas Day for generations. This year, that ham dinner will be a test of economic theory.
ham, Christmas, meal, price
268
2014-10-21
Friday, 21 Nov 2014 08:10 AM
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