About Inflation Rate and Adjusted Ticket Sales

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What is Inflation?:
Inflation is defined as a general increase in the prices of goods and services, and a fall in the purchasing value of money. Inflation can be artificial in that the authority, such as a central bank, king, or government, can control the supply of the money in circulation. If additional money is added into an economy, each unit of money in circulation will be worth less. The inflation rate itself is generally conveyed as a percentage increase in prices over 12 months. Most developed nations try to sustain an inflation rate between 2-3% through fiscal and monetary policy.

In lay terms, it means $1 won’t get you as much now as it did a decade ago. We generally use ‘inflation’ to refer to the overall purchasing power of money in our economy, but it can occur within sectors too.

Generally, an economy balances the decrease in purchasing power with an increase in income. In other words, that $1 buys less labor, just as it buys fewer goods. You need more money to buy things, but you also earn more money for your work, hence the rise in median income over time that occurs along with the rise in prices.

Price inflation causes a problem in the economy if income growth doesn’t keep up with it. You don’t have to be an economist to know that the price of goods today is higher than it was for your parents, and it was higher for them than for your grandparents. It also doesn’t surprise anyone to learn incomes are higher too. These growing numbers are the basic effects of inflation. This gradual shift in prices and wages is almost imperceptible for everyday consumers. But it has a profound effect on our livelihoods and the health of the economy around us.

The US Inflation measures the buying power of the dollar over time. In the United States, the Bureau of Labor Statistics (BLS) publishes the Consumer Price Index (CPI) every month, which can be translated into inflation rate. The following is the listing of the historical inflation rate per month for the United States (USD) in 2019.

2019’s US Inflation Rates by Month:
January – 1.6
February – 1.5
March – 1.9
April – 2.0
May – 1.8
June – 1.6
July – 1.8
August – 1.7
September – 1.7
October – 1.8
November – 2.1
December – 2.3
Total: 21.8 / 12 = 1.82.

How Is Inflation Measured?:
The BLS measures inflation by calculating the Consumer Price Index (CPI), a measure of the change in prices from one date to another.

The CPI looks at a sample of prices for categories of goods and services, and the BLS compares prices among dates to calculate the inflation rate.

The BLS publishes the CPI monthly, and you can see the change in prices across all categories or for select major categories, including food and energy.

Examples of Inflation:
In June 1985, the median sale price for a home in the US was $86,300, and the median household income was $23,620. In June 2011, the median home price was $240,200, and the median income was $50,054, according to the US Census Bureau.

You might see inflation in action at the grocery store each week in another familiar example. The price of a gallon of milk in the US has risen by 22% since 1995, from $2.48 to $3.03 in 2019, according to the Bureau of Labor Statistics (BLS).

Final Word:
The oldest is the tour, the more its revenue will grow based on the inflation rate. For example, a concert tour with $70 million box office in 1994 has now $120.8 million based on the 2019 dollar. A $50 dollar ticket in 1994 costs $86.25 today.

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