Thanks, ‘Avengers: Endgame,’ for reminding us why inflation matters
By Jay Zagorsky for The Conversation
Marvel recently re-released the final film in its “Avengers” series with extra footage and a post-credit tribute in hopes of breaking the worldwide record for top-grossing movie of all time.
So far, the gambit seems to have failed. As of July 2, “ Avengers: Endgame” had collected US$2.77 billion in worldwide ticket sales. This is still $22 million shy of James Cameron’s 2009 film “Avatar.”
But in reality, “Endgame” isn’t even close to the real record-holder — nor is, for that matter, “Avatar.” The reason why gives me an excuse to offer a short lesson on inflation.
Why adjust for inflation
Prices from year to year cannot be directly compared with one another because the cost to buy things changes dramatically over time.
For example, in nominal terms, it costs more today to buy movie tickets, popcorn and soda and get to the theater than it did in the past, while it costs much less to call your friends and invite them to come along.
Without adjusting for inflation and changes in purchasing power, comparisons from one time period to another are meaningless.
One of my grandfather’s favorite stories helps illustrate this. He used to talk about the “good old days” in the 1940s when a cup of coffee or a loaf of bread cost just 10 cents. But my grandpa didn’t consider how much lower his wages were back then.
The real box office king
And that’s why “Avengers: Endgame” is a long way from becoming the box office king. The heralded numbers don’t reflect inflation.
To demonstrate, let’s first look just at U.S. domestic ticket sales since it’s easier to calculate and see the effect.