## Monday, December 24, 2012

### The Price Of Guinness

When money's tight and hard to get
And your horse has also ran,
When all you have is a heap of debt -
A PINT OF PLAIN IS YOUR ONLY MAN.
Myles Na Gopaleen

How much has Guinness increased in price over time? Below is a graph of the price changes. The data is taken from a combination of the Guinness price index and CSO data

The R package code for this graph is below.

plot(pint\$Year, pint\$Euros, type="s", main="Price Pint of Guinness in Euros", xlab="Year", ylab="Price Euros", bty="n", lwd=2)
dev.print(file="Guinness.jpeg", device=jpeg, width=600)
dev.off()
Paul in the comments asked a good question. How does this compare to earnings?
price   Earnings/Price     Earnings per Week (Euro)
2008   4.22    167.31                 706.03
2009   4.34    161.69                 701.73
2010   4.2     165.02                 693.08
2011   4.15    165.81                 688.11
2012   4.23    163.56                 691.87
Here the earnings are average weekly earnings which is the modern and slightly different value to average industrial wage which the Pint Index used. It shows that even with a price drop in Guinness the total purchasing power of pints with wages decreased. This is based on gross wages increases in tax probably made the situation based on net wages worse.

Pintindex.csv is

Year,  Euros 1969, 0.2 1973, 0.24 1976, 0.48 1979, 0.7 1983, 1.37 1984, 1.48 1985, 1.52 1986, 1.64 1987, 1.73 1988, 1.8 1989, 1.87 1990, 1.93 1991, 2.02 1992, 2.15 1993, 2.24 1994, 2.34 1995, 2.42 1996, 2.5 1997, 2.52 1998, 2.65 1999, 2.74 2000, 2.88 2001, 3.01 2002, 3.24 2003, 3.41 2004, 3.54 2005, 3.63 2006, 3.74 2007, 4.03 2008, 4.22 2009, 4.34 2010, 4.2 2011, 4.15 2012, 4.23

Paul Rubin said...

How does it look after adjusting for inflation? Any idea why the price froze in the early '80s?

David Curran said...

Good Questions Paul

The guinness price index is oddly inflation resistent.
http://www.finfacts.ie/Private/bestprice/guinnessindex.htm

Over the decades it has stayed that you can buy about 140 pints a week with the average wage.

There was a bad recession in Ireland in the early 80's. I think that may have kept the price level for a long time. It says something to how bad the current recession was that it caused the price to drop. The average industrial wage dropped by I think about a fifth in the last 5 years which implies the 140 per week ratio could recently have been broken.

Paul Rubin said...

So in the US we need an entire "market basket" of goods to compute a Consumer Price Index that tracks inflation, and in Ireland you can do it with just Guinness? I like Guinness, but I seen to have underestimated its power. :-)