Shrinkflation
See also: poverty-premium
Resources
- Dec, 2023 ABC news online article
- ABS article on quality changes in the CPI
- Reserve Bank's inflation explorer - choose three categories and explore how prices have changed between two years (available from 1966 to 2022)
Acting head of of prices statistics at the ABS (Leigh Merrington) offers this description
when a product's "quantity (or volume) falls but the price remains the same"
Misc other quotes
"Shrinkflation is common in snacks and confectionary, like chocolate and chips, as well as in breakfast cereals, biscuits, spreads, like jam, and non-food items, such as shampoo and cleaning products," Merrington says
Shrinkflation has become more prevalent over the past couple of years, however we don't have statistics available to say by how much," Merrington says.
Mathematical applications#
- Calculating
Percentages#
ABS article demonstrates using the notion of observed and adjusted price to track the impact of quality changes on the CPI. Following table demonstrates for soft drink
| Period 1 | Period 2 | Period 3 | |
|---|---|---|---|
| Volume | 750ml | 750ml | 675ml |
| Observed price | $3.00 | $3.00 | $3.00 |
| Adjusted price | $3.00 | $3.00 | $3.30 |
| Observed movement | 0.0% | 0.0% | |
| Adjusted movement | 0.0% | 10.0% |