Food is getting cheaper

Food is getting more and more expensive. Everybody knows that.  Figure 1 illustrates the evolution of the price index of food since 1913. At the same time, the US economy also grows including the growth in real GDP per capita which is shown in Figure since 1929 (chained, in 2005$).  One can easily estimate which of these two variables grows faster. Figure 3 depicts the ratio of CPI and GDP per capita relative to that in 1929. Overall, the food price falls relative to the GDP per capita, i.e. one has to pay a lower share of income (a fixed portion of GDP per capita)  for the same amount of food (we do not consider nomenclature and quality of food here).  Food is getting cheaper with time. It is interesting that the ratio in Figure 3 has not been falling much since 1975.

Figure 1.

Figure 2.

Figure 3.

No comments:

Post a Comment