When I was in primary school we sang about Hot Cross Buns being “one a penny, two a penny”.
In those days, Britain still used pounds, shillings and pence. So, depending on which part of the nursery rhyme you subscribe to, the price of a hot cross bun was either 1d or 1/2d.
There were 240 pennies to the pound, so the lower price hot cross bun would be 0.2p in modern British currency. Or around 0.4 New Zealand cents.
Yesterday I picked up a hot cross bun Baker’s Delight store for $1.80.
In round numbers that’s 450 times the price of the nursery rhyme bun.
Mind you, it took a long time. According to Wikipedia, the nursery rhyme originated in 1798. That’s 214 years ago.
By my, admittedly rusty, school maths*, that represents an annual inflation in the price of hot cross buns of around 1.1%.
Did I go wrong anywhere with this?
- I used this formula: i = ( FV / PV) (1/n) -1
Hi Bill,
This is all very true, but as I promised I’ll add a few little things to look into for these prices.
One thing I’d note though is that the increase in the price level more generally only really got kicking off during the last 50 or so years. As a result, if hot cross buns had just been generally following inflation overall, the 1.1%pa figure could be a bit misleading.
One other point when looking at hot cross buns – we need to ask what the price of these buns has done relative to all other goods and services. Over the past 200 and a bit years we have seen the relative price of inputs fall for hot cross buns, but we have also seen incomes rise – and given that hot cross buns are a “normal good” it is ambiguous whether hot cross bun inflation has exceeded inflation in goods and in prices.
On final point, a hot cross bun in 1798 would have tasted and felt different than a current hot cross bun – any changes in the quality of said bun should be taken into account.
I’m guessing here that a 2012 hot cross bun is likely to taste nicer than a 1798 one, we’ve got all kinds of laws about food quality to make sure there’s no nasty surprises.
It would certainly taste fresher.
[…] 5, 2012 Over on his blog, Bill Bennett has been discussing hot cross bun inflation over the last couple of hundred years – saying that it has averaged about […]
Saw hot cross buns at the Auckland Art Gallery at $4.50 each, mind you they looked delicious and, given the location I wouldn’t say they were over-priced