#CostofLiving #Inflation #EssentialItems #EconomicTerm
Have you ever wondered if there is a specific term for the phenomenon where the cost of living increases as new items become essential in society? 🤔 This question is a thought-provoking one, especially in today’s rapidly evolving technological landscape where items like phones and computers have become necessities for both work and social interactions. Let’s dive into this concept and explore if there is a term for this economic phenomenon.
**Understanding the Impact of Essential Items on Cost of Living**
Inflation is a commonly used term to describe the overall increase in prices of goods and services over time. However, the concept of essential items becoming required for daily living is a separate phenomenon that can also contribute to an individual’s expenses. As new technologies emerge and societal norms shift, the need to own certain items can significantly impact one’s budget.
**Is There a Specific Term for This Concept?**
While there isn’t a universally recognized term for the increased cost of living due to the necessity of owning new items, economists have explored related concepts. One term that is often used in discussions of this nature is “technological inflation.” This term refers to the idea that as technology advances, individuals may need to spend more money to stay up to date with the latest devices and gadgets.
**Factors Influencing the Cost of Living**
It’s essential to consider that the cost of living is influenced by a wide range of factors beyond just the necessity of owning new items. Economic conditions, market trends, and personal spending habits all play a role in determining how much individuals need to budget for their daily expenses. While the concept of essential items contributing to increased costs is significant, it is just one piece of the larger economic puzzle.
**Exploring the Validity of the Concept**
The idea that the cost of living can be impacted by the necessity of owning new items is a valid one, especially in today’s tech-savvy world. However, it’s crucial to acknowledge that there are many other factors at play when it comes to determining expenses. While owning a smartphone or computer may be essential for many individuals, there are still ways to manage costs and prioritize spending in other areas.
**Literature and Research on the Topic**
If you’re interested in delving deeper into the concept of essential items influencing the cost of living, there is a wealth of literature available on the subject. Economic studies, research papers, and academic articles often explore the relationship between technological advancements and household expenses. By consulting these sources, you can gain a better understanding of how new items impact our financial well-being.
In conclusion, while there may not be a specific term for the increased cost of living due to the necessity of owning new items, the concept itself is a valid and relevant one in today’s society. By considering the impact of essential items on our expenses and exploring ways to manage costs effectively, we can navigate the ever-changing economic landscape with greater confidence. Remember, staying informed and proactive in your financial decisions is key to achieving financial stability in a world where owning the latest gadgets can come at a premium.
Inflation does account for this. The basket of goods that inflation measures is updated on a regular basis so goods that were required in society in 1950 may not be currently in the basket now and newer goods like phones have taken their place.
https://webapps.dol.gov/dolfaq/go-dol-faq.asp?faqid=94&topicid=6&subtopicid=116
Costs and prices are different, and it is opportunity cost that is the relevant metric. The assumption that new items like phones and computers increase the cost of living is doubtful. Those items replace many other goods and services and decrease the time it takes to accomplish many tasks. If those items actually increased the cost of living, most people would not purchase them.
Eh, I don’t think there’s a term for this. You could buy a cheap phone and laptop for under $1,000. These items alone replace what was previously a typewriter, camera, tv, video recorder, calculator, stamps, music player, encyclopedia, the list goes on.
If anything you’re saving money. I remember being excited to get a cd player in my room, and it was like $700 which was insane at the time.
There’s also an after-market for these items. The barrier to entry is extremely low. And they can last 5-10+ years.
The baskets are updated, but also keep in mind that tech replaces a lot of stuff that’s no longer necessary. Consider an iPhone vs. an alarm clock, typewriter, telephone, tv, cd player, radio. camera, scanner, calendar, etc. Those items weren’t free. Some of which were a lot of money in todays dollars.
I think it depends how you define necessities. This is apparently similar to the [basic needs approach to poverty](https://en.wikipedia.org/wiki/Basic_needs) and needing more items might be considered similar to raising the poverty line.
But with discrete items instead of a poverty line, the problem is that it’s hard to measure what a “necessity” is. And it’s quite a normative question about what should happen in the economy; in contrast to something that’s happened already and can be analysed. The page already describes several sets of necessities (starting food, shelter, clothing; then other proposals to add many things else like water, transportation, sanitation, healthcare). So it’s hard to agree on what a useful set of necessities are, or if someone wants to change it, what should be added. And that makes it a difficult topic to discuss.
I don’t know if this fully answers your question. I’ve definitely heard of the idea before and I think it’s an interesting one to consider. But I hope I’ve pointed towards some of the challenges of taking that approach.
One concept that fits part of what you are saying is that of [necessities](https://en.wikipedia.org/wiki/Necessity_good), which are almost universally purchased within an economy, regardless of how low one’s income may be. This is an old concept, but not a very active area of economic thought, which explains the brevity of the linked wikipedia article.
What you’re describing is the evolution of the basket of goods which tend to be necessities. Yes, computers and phones are now necessities. As others have pointed out, they have replaced other things we used to buy (which may or may not have been necessities), so whether or not the cost of living has risen is doubtful.
If I were to invent a term for what you describe it would be “necessity creep”.
The total quantity and type of goods that build up into the different CPI buckets are not defined down to the type of good level. Due to this, you never can determine what the average consumption bundle is at the type of good level unless they release the survey data. This makes it impossible to determine if demand increased due to net wealth increases over the years at least if you’re tracking this in CPI.
https://www.bls.gov/opub/hom/cex/calculation.htm
I don’t think it’s a mistake to track inflation this way, but it makes it more difficult to determine what is causing inflation.