Wednesday, September 17, 2008

Zack Morris’s Telephone and the CPI

Sometimes I have trouble figuring out the mutual pop culture references that I share with my students who are 5 to 10 years younger than me. One thing that most students seem to remember is Saved by the Bell, the early 90s teen sitcom, which they watched on reruns and I remember seeing the first run.

Yesterday I was talking about the consumer price index (CPI), the way the government measures inflation. Basically the government makes a list of items a typical person would buy, called a basket, then tracks changes in those prices between years. One problem is that most everyone has a cell phone now, but 20 years ago they didn’t. Even if they did it would look like Zack Morris’s phone and probably cost a lot more. So it is really hard to track price changes if technology changes rapidly.

Bookmark and Share

1 comment:

Dan said...

This made me curious, so I went onto Factiva and found an article from 1993 about cell phone plans. The author creates this scenario:

"The customer logs 120 minutes in business calls during weekdays between 8 a.m. and 7 p.m. Half of the calls are in the 201 area code; the remainder are long distance calls, divided equally between Manhattan and Washington, D.C."

The cost would be between $102.95 and $108.90 depending on the carrier. As for text and video messaging, push email (Blackberry style), mobile web... no amount of money could get them for you because they didn't exist.

Today you can get unlimited voice and messaging on T-Mobile for $99.

Now that's change we can believe in!