The pizza chain Little Caesars is raising the price of its famous $5 Hot-N-Ready pizza for the first time in a quarter-century. The staple diet of college students everywhere was first introduced in 1997. Professor Jeremy Horpedahl provides this fine chart on the number of pizzas the median U.S. worker could buy if they spent all of their income on pizza.
This is a nice illustration of time prices. The nominal price can stay the same, but time price falls by 50 percent, because nominal wages doubled. You now get two pizzas for the time it took to earn the money to get one in 1997. Pizzas became 100 percent more abundant.
The New York Post reports that the price of the promotional pie, which was first introduced through advertising shaker boards, is increasing by 11 percent to $5.55. Little Caesars CEO Dave Scrivano said the increased price is meant to balance rising labor and commodities costs, as the price of pepperoni has soared by more than 50 percent over the pandemic.
After considering the recent price increase, these pizzas are still 44 percent less expensive today than 1997. This means you get 80 percent more pizza today for your time than 25 years ago. Pizza abundance is growing at 2.37 percent a year.
COVID may have claimed another victim, one that will be sadly missed the dorm-rooms across the world, unless students can find 55 extra cents in their sofa cushions.
Gale Pooley is a Senior Fellow at the Discovery Institute and a board member at Human Progress
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