Tuesday, February 12, 2008

You Are What You Spend - New York Times

You Are What You Spend - New York Times: "At the average wage, a VCR fell from 365 hours in 1972 to a mere two hours today. A cellphone dropped from 456 hours in 1984 to four hours. A personal computer, jazzed up with thousands of times the computing power of the 1984 I.B.M., declined from 435 hours to 25 hours. Even cars are taking a smaller toll on our bank accounts: in the past decade, the work-time price of a mid-size Ford sedan declined by 6 percent."

This is a very interesting story but what drives me nuts is the focus on how electronics products drop in price so much. All these things are based on chips and they are subject to Moore's Law (doubling chip density every 18 months)

They forget that far more money is spent on things like gas and food and other consumables. The other day at the store I almost fell over when I saw a $5.99 gallon of organic milk.

Basic food items are getting more and more expensive and that hurts lower income people more then anyone, but we can get more kinds of food now then anytime before in the history of the world, some people are even going on raw food diets, something that would have been virtually impossible just 20 years ago.

The second graph in the article is particularly interesting since it shows how quickly various technologies have been adopted by people, The microwave oven and cellphone were adopted very very quickly.

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