Posted On: Thursday - September 22nd 2022 8:46PM MST
In Topics:   Economics  Inflation
Unlike one of Peak Stupidity's normally straightforward Inflation calculation posts, this one's a doozy in 2 ways: 1) This comparison between then and now results in "extra big-ass
There I was, trying to think of another inflation post to write, and a light bulb appeared above my head. This was at Lowes, you understand, and there were actually 8 light bulbs ... in each package, on a shelf above my head. Ahaaa, there's your post.
See, I haven't bought light bulbs in something like 13 years. The reason for that is also 2-fold: 1) I was in my first phase of prepping, with a big lull till more recently and 2) The US Feral Gov't had gotten involved in light bulbs, for cryin' out loud, you know, some penumbra of one of the clauses in that lost Article VIII of the Constitution. No kidding, President Bush was telling me I could no longer buy incandescent bulbs pretty soon.
Well, there they were again, the brand and type you see above. That works out very nicely, as I'd bought about 20 cases (of 6 8-packs each) of the same brand, also soft white, but with a longer life time, 1,000 hrs, vs. these new ones that claim 750 hrs.** I remember that I had bought those bulbs before, in 2009, at 25¢ each, when bought by the 8-pack. (All wattages were the same price) They are now, (slightly lower than in the ad above) $2.00 each at the very same store. (75 Watters)
Before I go claim this as "see, another example of higher inflation than the BLS boys tell us", let me provide that caveat. Hardly anyone buys incandescent bulbs - in fact till now I'd thought they were completely verboten. Apparently, they aren't, but, since most people buy the LEDs now - I completely missed the compact fluorescent era, per my own doing - the supply/demand numbers are completely different. Not many people want these bulbs, and not nearly as many are made. Do the plants in China not operated on the same economy of scale as the (I'm pretty sure) American plants operated in '09?
Still, let me do this one calculation, with that 3/4 lifetime also taken into account. Without the bulb-lifetime adjustment, I get a whopping 17.3% average inflation rate over the last 13 years. (Granted, the last year may comprise a bigger share than the rest.) Then, to adjust for that 25% lower lifetime than the old bulbs, we get 19.8%. Whaaa! Let's get back in the DeLorean, Doc! Someone set this thing to 1979! [Said in that hilarious incredulous Michael J. Fox voice.]
There is that substitution factor, as our baskets of goods (hell, even the baskets have been substituted) would not include incandescent, but instead, LED bulbs now. Let's forget that maybe I like incandescents better. I bought LEDs due not just to this incredible inflated price I didn't want to pay, but for bulb-lifetime reasons for this particular purpose.
I bought a couple of 8 packs of GE "Classic" LEDs 60W-equivalent for $18 a pack, i.e. $2.25 each. Per the web, the lifetime of these things is 13 years at 3 hrs/day. That's 13 years x 365 days/yr x 3 hrs/day = 14,235 hours! Usage wise, the fixed-cost purchasing price per usage time is very good. One would pay ~$3.50 for the number of old 1,000 hr bulbs to get the same usage. That makes the new ones functionally cheaper to buy.
Then, as I noted above, there's the recurring cost of electricity use. These bulbs have "wattage" ratings, but that's due to the fact that bulb buyers don't think in lumens - the unit of light intensity, "luminous flux" to be precise about it. We are used to bulbs rated by Watts from the old incandescents. Therefore, the current ones are advertised by "wattage", but with the actual energy use given. In this case, for the same light output, these use 10W. The old 60W bulbs use, there you go, 60W. Most of that energy goes to heat, OK in the winter, highly uncool in the summer. I do appreciate some new things!
I'm paying over 13¢/kWh for electricity. The LEDs use 0.01 kWh per hour, while the incandescents use 0.06 kWh per hour. Based on the long-lifetime of over 14,000 hrs (I believe the way one should do this), the savings in the recurring electricity costs will be a whopping $92 over the course of the alleged LEDs lifetime! That's 13 changes of the incandescents in that time, and, if one's time is worth anything, that adds onto the savings.
So, we have had a lot of deflation in light bulb fixed AND recurring costs due to inventions that result in substitution. Can this be the case for lots of goods and services? I don't know, but the problem is keeping ahead of the FED.
Well, that was fun. Let's see what the conclusions are:
1) The substitution of modern items for obsolete ones in the proverbial CPI basket of goods can makes sense and subtract from an otherwise rising inflation rate. Other times, as with substitution of a cheap Chinese bicycle for the old well-made Schwinn, that process gives errors that result in a rosier picture than what is the case. Other times, as with substitution of a Hyundai Accent for a Dodge Challenger, it doesn't even make sense.
2) If you really want incandescent bulbs, yes, inflation for that product has been 19% average, over the last 13 years.
3) The LED bulbs are not my hill to die on, and to me they are an exception to the law commenter MBlanc46 has told me at least once - "Things always get worse."
Finally, how many Luddites does it take so screw in a light bulb? The math says about 14 times as many, on average.
PS: I wonder, since the bulb-ban was lifted, will incandescent bulbs become like vinyl record albums, cooly retro? I've still got a some in the attic. If thats true, I wish I'd bought 50 cases, but then, come that first Richter 8 earthquake, I'll have lost my ass!
* For more on this topic see our further posts Hedonics - Pleasure from Products and Services and Hedonics in the Current Era of Cheap China-made Crap
** Now, some of these specs annoyingly give lifetime in years, based on some hourly use that I didn't know. I was lucky to find one set of specs that gave me the number I wanted here.