BY Joe Pine

What Inflation Measures Miss About the Experience Economy

Inflation & The Experience Economy

As with most everyone else, I’ve been thinking a lot about inflation.

I’m old enough to remember the stagflation of the 1970s (as a kid, of course) and do not want to see a repeat of that period.
And today’s inflationary times brought to mind something I’d been thinking about for a while – how the shift into today’s Experience Economy is not properly taken into account by the government.

So I wrote about two of the primary effects this shift is having on our thinking about inflation and published it as an Op-Ed in The Wall Street Journal: “Inflation and the ‘Experience Economy‘”.

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Give it a read (a subscription may be required) and let me know what you think about it. And let me here also add another thought that didn’t make it into the WSJ inflation piece due to space limitations.

Inflation & The Experience Economy – An Addendum

These three paragraphs belong between the penultimate and final paragraphs of the article:

But what hasn’t gone up commensurate with income? Our time.
The time available for experiences remains 24 hours a day, 7 days a week. And, as we all know, time is money.
Ah, but money is time as well! A great way of measuring experiences is what I call the money value of time or MVT. Go to a movie, pay a $12 admission fee for a two-hour experience, and your MVT is 10¢/minute.

Go to Walt Disney World and spend eight hours in the Happiest Place on Earth for that $109 admission fee and you’re MVT is 23¢/minute. (Of course, these figures don’t include food & beverage, memorabilia, or other ancillary expenditures, but such data is not public.)
The Walt Disney Company is not an extreme example, however. Countless experiences today – including escape rooms, immersive art experiences, and so many of the virtual experiences consumers substituted for physical ones during the pandemic – gain 40¢, 50¢, and more per minute.

And I say “countless” not because they are innumerable, but quite literally because the government does not count for them properly.

And that led to my conclusion – that the U.S. government (as well as governments around the world) need to understand that experiences are indeed a distinct economic offering and measure them accordingly.

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