{"id":17121,"date":"2019-07-07T18:35:35","date_gmt":"2019-07-07T18:35:35","guid":{"rendered":"https:\/\/www.lifeandnews.com\/articles\/?p=17121"},"modified":"2019-07-08T19:02:09","modified_gmt":"2019-07-08T19:02:09","slug":"thanks-avengers-endgame-for-reminding-us-why-inflation-matters","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/thanks-avengers-endgame-for-reminding-us-why-inflation-matters\/","title":{"rendered":"Thanks, ‘Avengers: Endgame,’ for reminding us why inflation matters"},"content":{"rendered":"

Jay L. Zagorsky<\/a>, Boston University<\/a><\/em><\/p>\n

Marvel recently re-released<\/a> the final film in its \u201cAvengers\u201d series with extra footage and a post-credit tribute in hopes of breaking the worldwide record for top-grossing movie of all time.<\/p>\n

So far, the gambit seems to have failed<\/a>. As of July 2, \u201cAvengers: Endgame<\/a>\u201d had collected US$2.77 billion in worldwide ticket sales<\/a>. This is still $22 million shy<\/a> of James Cameron\u2019s 2009 film \u201cAvatar.\u201d<\/p>\n

But in reality, \u201cEndgame\u201d isn\u2019t even close to the real record-holder \u2013 nor is, for that matter, \u201cAvatar.\u201d The reason why gives me an excuse<\/a> to offer a short lesson on inflation.<\/p>\n

Why adjust for inflation<\/h2>\n

Prices from year to year cannot be directly compared with one another because the cost to buy things changes dramatically over time.<\/p>\n

For example, in nominal terms, it costs more today to buy movie tickets, popcorn and soda<\/a> and get to the theater than it did in the past, while it costs much less to call<\/a> your friends and invite them to come along.<\/p>\n

Without adjusting for inflation<\/a> and changes in purchasing power, comparisons from one time period to another are meaningless.<\/p>\n

One of my grandfather\u2019s favorite stories helps illustrate this. He used to talk about the \u201cgood old days\u201d in the 1940s when a cup of coffee or a loaf of bread cost just 10 cents. But my grandpa didn\u2019t consider how much lower his wages were back then.<\/p>\n

Adjusting for inflation<\/a> means a 10-cent cup of coffee in 1940 would cost about $1.84 in 2019 dollars. Today you can buy coffee at chains like 7-Eleven<\/a> for a lot less.<\/p>\n

The real box office king<\/h2>\n

And that\u2019s why \u201cAvengers: Endgame\u201d is a long way from becoming the box office king. The heralded numbers don\u2019t reflect inflation.<\/p>\n

To demonstrate, let\u2019s first look just at U.S. domestic ticket sales since it\u2019s easier to calculate and see the effect.<\/p>\n

The current list of top-grossing films<\/a> at the U.S. box office is led by \u201cStar Wars: The Force Awakens<\/a>,\u201d which came out in 2015 and earned a nominal $936 million, followed by \u201cEndgame\u201d at $841 million and \u201cAvatar\u201d at $761 million.<\/p>\n

Adjusting for inflation alters the list dramatically<\/a>. Box Office Mojo, an online box-office reporting service operated by IMDb<\/a>, calculates inflation by multiplying average ticket prices<\/a> in a given year by estimated admissions.<\/p>\n