Hi y’all! Here are five stories from this week that contained some neat applications of economic principles or are related to teaching:

1. Plant lovers are snapping up flytraps and other carnivorous plants in record numbers [The Hustle]

2. Wealth increased 37% for Americans 75 and older, but declined 23% for people under 35 during the post-pandemic years [Associated Press]

3. Office workers spend an average of $6,736 a year commuting, eating, parking, and dressing for work, while losing 40 workdays to the RTO routine [Inc]

4. If you aren’t shouting your work wins from the office rooftop, do they even count? [Business Insider]

5. The journey of one banana from farm to store shows how the war’s economic effects have cascaded into some surprising industries [The New York Times]

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California growers ripped out roughly 47,000 acres of vineyards in a single year. As Americans continue to drink less wine, many are replacing their vineyards with pistachio trees. This week’s article breaks down the economic reasoning and why it might backfire. The answer lies in an old idea from agricultural economics that almond growers are living with right now.

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Every now and then, I get on a kick of cleaning out my pantry. Once it starts to feel cluttered, I get the urge to start tossing things. Goodbye, unopened pack of cookies. So long, half-eaten bag of chips in a flavor I didn’t love. Oh, hello, four bottles of wine that have been sitting on the top shelf for several years. I didn’t realize I had started collecting wines.

If you’re anything like me, you have a similar story. Maybe not the chips, but the bottles collecting dust on the top shelf. Americans just aren’t drinking like they used to, and wine is no exception.

That shift has sent shockwaves across California. From Napa and Sonoma down through the Central Valley, growers crushed fewer grapes last year than in any year since 1999. Roughly half of this year’s harvest went in without a buyer. It turns out growers have started doing some cleaning out of their own.

Farmers have been pulling up endposts, lining up excavators, and ripping out vineyards that previously produced for decades. Over just the past year alone, California has removed almost 10% of its vineyards. In their place, farmers are planting almond orchards, pistachio groves, and olive trees.

Let’s give this story a few minutes to breathe before we start looking at the economics and look at why Americans stopped pouring a second glass.

The Demand for Wine Keeps Falling

For the sake of transparency, those bottles in my pantry were gifts. I’ve never been much of a wine drinker, and I can’t remember a time when I bought a bottle myself. I’ll have a glass if I’m at dinner with friends splitting a bottle, but I’m not ordering one on my own. It turns out my habits don’t look all that different from everyone a lot of other Americans.

There’s been a slow and steady move toward drinking less and reaching for non-alcoholic options instead. That shift isn’t just coming from aging Millennials like me. Gen Z drinks noticeably less than older generations did at the same age, but that’s not a phase they’ll likely grow out of. GLP-1 drugs like Ozempic and Wegovy are also getting some of the blame, but these collectively point in the same direction: Americans want less wine.

That ripples all the way back to the vineyard, since people aren’t exactly buying wine grapes to snack on. Economists call this derived demand, since the demand for wine grapes comes almost entirely from the demand for wine. As bottles pile up, wineries and retailers have had to cut prices to move what’s on the shelves. Some well-known wineries are even selling their surplus to retailers like Costco to sell under a private label rather than let it sit unsold.

And that squeeze has made its way down to the grape growers as well. Red wine grapes that sold for $1,822 a ton back in 2020 fetched about $1,281 in 2025. That’s a drop of about 30%! People aren’t just shifting from Cabernets and Merlots to Chardonnays, either. White wine grapes have slipped too, though not as much, from about $797 a ton to $707.

As growers see those prices fall, it shouldn’t come as much of a surprise that they’ve reduced the quantity of grapes they’re supplying to the market. That’s the law of supply at work. Fewer grapes means less wine, and U.S. wine production has fallen more than 27% since 2020.

But most farmers aren’t going to let their land sit idle. If they aren’t growing grapes, what are they growing instead?

The Other Kind of Substitute

The short answer is nuts. Not the “this market is nuts” kind. I mean actual tree nuts, like pistachios, almonds, and walnuts. To understand why, we need to think about how sellers handle substitutes.

Substitutes are a lot easier to picture from the buyer’s side. We see them sitting next to each other on store shelves every time we go shopping. And when a streaming subscription gets more expensive, we start eyeing the other services. For consumers, people tend to buy more of a product when its substitute gets pricier.

Sellers care about substitutes too, just in a different way. Farmers can often use the same land, labor, and equipment to grow something else. When the price of one crop falls relative to another, they shift those resources toward the one that pays better. It’s the mirror image of what buyers do. Buyers move away from the expensive product toward the cheaper one, while sellers move away from the cheaper product toward the one that pays more.

This story has been playing out in California for the past several years. Much of the Central Valley land that grew Cabernet grapes can also grow pistachios, since both crops like hot, dry summers and cool winters. Switching isn’t costless, because the vines have to come out and new trees have to go in. But farmers have been doing it anyway, and they’ll keep doing it as long as the new crops look more profitable.

And boy, do they look profitable. California farmers have expanded their pistachio acreage roughly sixfold over the past two decades, from about 100,000 acres to more than 600,000. The crop brings in an estimated $2.5 billion a year!

More and more growers are looking at neighbors who swapped their vines for orchards and considering the same. The catch is that a pistachio tree doesn’t pay off right away, and every other grower is seeing the same signal.

The Cobweb Problem

Put all these trends together, and you get a much more complete picture of how markets work. Nobody in Sacramento told farmers to swap Cabernet for pistachios. Prices nudged them to do it on their own, which is what economists call spontaneous order. A grower doesn’t need to understand why someone in Chicago skipped wine at dinner. They just need to read the prices.

But in farming, you can’t respond to a price signal right away. Pistachio trees take several years to reach full yield, so a grower who rips out their vines today won’t see a real harvest until the early 2030s. They have to make decisions based on today’s prices, even though they’ll be selling at 2032 prices. Nobody knows what those will be.

That lag is the heart of one of the oldest ideas in agricultural economics: the cobweb model. It gets its name from the spiral it traces on a supply-and-demand diagram.

When a crop’s price is high, lots of farmers decide to plant more of it at the same time. They all see the same high price and hear cash registers ringing in their ears. Years later, all of that extra harvest arrives at once. To get buyers to take the whole bounty, prices fall until it all sells.

Now farmers are looking at a much lower price, and have to respond again. Some plant a little less, while others switch part of their acreage to a different crop. A few years later, the harvest comes in smaller than buyers want, and prices climb back up. Those higher prices lead to more planting, which leads to another glut, which pushes prices back down. Depending on how strongly farmers and buyers react, those swings can shrink over time or keep going for years.

Almond farmers have been living in this web of prices and quantities for the past decade. New almond plantings peaked at nearly 136,000 acres in 2016 as high prices lured growers to convert their farmland. By 2024, new plantings had fallen by more than 90% after the 2016 wave started producing and dragged prices down.

Pistachios may soon be headed into the same spiral. Plantings were strong through 2022 but fell off sharply as growers grew wary of a looming wave. Even so, about 124,000 acres of young pistachio trees will start producing over the next three to five years.

A slowdown in planting doesn’t mean acreage is shrinking. Rather, it means it’s growing more slowly. Add tens of thousands of acres of freshly cleared vineyard to that picture, and growers answering today’s pistachio signal may end up harvesting into tomorrow’s pistachio slump. That’s exactly what the cobweb model predicts.

Final Thoughts

There are a lot more layers to this story than this article can hold. For starters, some growers are probably falling for the sunk cost fallacy. Their family’s identity is tied up in vines that took decades to mature, and it’s hard to walk away from something you’ve invested that much in. That’s not how economists say you should make decisions, but behavioral economics would tell you it isn’t surprising either.

Then there’s water. Tree nuts generally need more water than wine grapes, and it’s not clear California can support a big expansion of orchards. The state’s Sustainable Groundwater Management Act is already reshaping which crops can profitably grow in which basins.

There’s also a trade war story hiding in here, too. Almonds, walnuts, and pistachios depend heavily on export markets, and they’ve become regular targets for retaliatory tariffs from countries hit by higher U.S. import tariffs. Most tree nuts are sold abroad, and American buyers aren’t likely to pick up the slack if exports dry up.

I’m not ready to spend the next few weeks writing about tree nuts, so I’ll leave those stories as homework for you. Feel free to submit your answers in the comments. In the meantime, it’s time to restock my pantry with some new snacks. I hear pistachios are really popular. If the cobweb model is right, I should be able to get them cheap by 2031.

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• Just 54% of U.S. adults say they drink alcohol, the lowest share since Gallup started asking in 1939 [Gallup]

• California produces more than 80% of U.S. wine, thanks to its Mediterranean climate and geography [Associated Press]

• California grows about 99% of U.S. pistachios and more than 60% of the world’s supply [Fortune]

• California’s pistachio bearing acreage has grown nearly fivefold over the past two decades, passing walnuts in 2021 to become the state’s second-largest tree nut crop [US Department of Agriculture]

• Pistachio trees are “alternate bearing,” meaning a heavy crop one year is often followed by a light one the next [Rahmani Group]

Hi y’all! Here are five stories from this week that contained some neat applications of economic principles or are related to teaching:

1. What a hiring slowdown signals about the state of the U.S. economy [PBS]

2. At some universities, parents can pay to make sure their children are cared for, the way they were back home [The New York Times | Archive]

3. Norway is set to impose a temporary ban on smart glasses in public places, including beaches, parks, and schools [Gizmodo]

4. Demand is booming for Slovenian domain names (.si) following the executive order requiring government agencies to refer to artificial intelligence (AI) as super intelligence (SI) [TechCrunch]

5. Trade deficit hits $105.6 billion, widest since just before Trump tariffs enacted last year [CNBC]

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The bottle deposit in most deposit states has been 5 cents since the early 1980s. Four decades of inflation have quietly drained the incentive. Massachusetts’s redemption rate fell from 87% in 1995 to 33% last year, but Connecticut’s more than doubled after it raised its deposit to 10 cents. This week’s article explains how this policy tool is supposed to work and why a frozen price breaks it.

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I was bored last week and stumbled onto one of my favorite Seinfeld episodes: “The Bottle Deposit.” If you’re not familiar with the premise, two neighbors hatch a plan to round up bottles and cans around New York City and haul them over to Michigan to cash in on the ten-cent refund.

Before you get any smart ideas, you should know it’s illegal to collect a refund on a bottle or can purchased in another state. Of course, that hasn’t stopped some people from cashing in millions of dollars’ worth of bottles and cans.

But as I watched, my first thought was different. This episode first aired about thirty years ago, and the deposit rates haven’t really changed since. In most states with bottle deposit laws, the deposit has been a nickel since the early 1980s. In case your memory is a little foggy (or nonexistent), a gallon of gas at the time cost about $1.25, and the average home was selling for around $83,000. Those prices have exploded since, but the nickel deposit hasn’t budged in most states.

So what happens to a market when a price gets frozen for four decades?

@officialseinfeldtvWhere there's a will, there's a way to Michigan. Stream the complete series on Netflix. #recycle #michigan #sitcom

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Why Bottle Deposits Even Exist

Only 10 states and 1 territory have bottle deposit programs, but it’s easy to see why they adopted them. Throwing away a bottle instead of recycling it imposes a cost on society. If you toss it out your car window, it becomes litter someone else has to pick up. Throw it in the trash, and it eventually takes up valuable landfill space. Economists call this a negative externality: those costs don’t fall on you, but instead fall on others.

Because the person making the disposal decision doesn’t bear the full cost, people in places without deposits will throw away too many bottles and recycle too few.

The classic fix for a negative externality is a Pigouvian tax. These taxes increase the cost of a harmful behavior until it more closely matches the social cost. Carbon taxes and congestion fees work in a similar manner, but bottle deposits have a nice twist. The same nickel penalizes the bad behavior and rewards the good one.

The mechanics vary by state, but they’re all fairly similar. Buy a bottle and pay an extra 5 cents at the store. Return it to a redemption center and get your 5 cents back. You forfeit your deposit if you toss it, which effectively becomes a tax on littering. One small fee ends up working as both a tax on disposal and a subsidy for recycling.

Of course, the whole system depends on the deposit being large enough to actually change behavior. If it isn’t meaningful, the incentive quietly dies. Which brings us back to that nickel that seems stuck in time.

When a Nickel Stopped Mattering

Massachusetts is a good place to see what that looks like. The state went from an 87% bottle redemption rate in 1995 to just 33% last year. That’s the worst rate among the states with bottle deposit laws. Fewer people are returning their bottles, but it’s probably not because they stopped caring about the environment.

The state’s 5-cent deposit took effect in 1983, and inflation has been eating away at it ever since. Adjusted for inflation, a nickel from the early 1980s is equivalent to about 16 cents today. In the early 1980s, a nickel was a meaningful chunk of what a bottle of soda cost. Today, a 5-cent deposit is just 2% of the price of a 20-ounce Coke at a convenience store.

Meanwhile, the effort of returning a bottle hasn’t gotten any easier and your time hasn’t gotten any cheaper. On a 6-pack of sodas, a 5-cent deposit means an extra 30 cents at checkout. That’s easier to ignore when everything else in your shopping cart is getting more expensive. The mental math of rinsing the bottles, bagging them, and driving them to a redemption center for 30 cents increasingly doesn’t make much sense. It’s no surprise that two out of three Massachusetts bottles never make it back.

So, what would happen if the deposit doubled to 10 cents? Would that really change anyone’s behavior? Economic theory says yes, and thankfully a state has already run the experiment.

The Connecticut Experiment

That state is Connecticut. Its deposit sat at 5 cents from 1978 until 2024, and its redemption rate slid below 50%. During a 2021 debate to raise the deposit, one state senator called it “the worst redemption rate of any bottle-bill state in the nation.” Their solution was to double the deposit to 10 cents, which they said would give shoppers a bigger reason to bring bottles back. Oregon had already doubled its rate back in 2017 and saw its returns increase by more than 15 percentage points.

The new rate took effect in 2024, and the results were dramatic. Connecticut’s redemption rate climbed from 44% in 2023 to 65% in 2024 to 92% in 2025. It’s now the highest of any deposit state and nearly triple Massachusetts’s 33%. The nickel doesn’t deserve all the credit, since Connecticut also added about 300 new redemption sites. Still, a rate that had sagged for years more than doubled in two.

But remember our two neighbors from the Seinfeld episode? If the show were filmed today, their road trip would be a whole lot easier. New York’s deposit is still a nickel, and Connecticut now pays back a dime. Instead of hauling a mail truck of bottles roughly 600 miles to Michigan, they could take a short drive up I-95.

Connecticut officials say they were caught off guard by a flood of out-of-state returns, which means the 92% redemption rate may be overstated. It’s not clear by how much, because Connecticut has no record of where redeemed bottles were originally purchased. Lawmakers have responded with a crackdown law, and the debate over rolling back to 5 cents has already resurfaced.

Final Thoughts

One way to shrink the gap is for neighbors to match, and New York is weighing exactly that. The proposal is called the “Bigger Better Bottle Bill,” and it would double New York’s deposit to 10 cents, the state’s first increase since 1983. It has been introduced before, but it hasn’t become law yet.

The bottle deposit isn’t the only policy stuck in a time capsule. Minimum wages, fines, fees, and penalties set at one moment and never revisited lose their real-world bite while looking identical on paper. The fix is unglamorous: index the amount to inflation so it adjusts on its own. Without that, no one has to repeal a policy for it to stop working.

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• Oregon passed the first modern bottle bill on July 2, 1971, which instituted a 5-cent refundable deposit on beer and soft drink containers to combat roadside litter [Bottle Beer Resource Guide]

• Connecticut’s beverage container redemption rate hit 92% in 2025, rising significantly from its 65% rate in 2024 [Waste Dive]

• Municipal solid waste landfills are the third-largest source of human-related methane emissions in the United States, accounting for approximately 14.4% of these emissions in 2022 [Environmental Protection Agency]

• The New York Department of Taxation and Finance collected $102.7 million in unclaimed 5-cent deposits from the state’s container redemption program in 2016 [Waste Dive]

Hi y’all! Here are five stories from this week that contained some neat applications of economic principles or are related to teaching:

1. McDonald’s uses machine learning to have AI price your Big Mac [The Verge]

2. Holiday airfares are tracking toward a 10-year high in the US, with the average round-trip flight over Thanksgiving weekend running close to $100 more than last year [CBS News]

3. US consumer confidence fell to its lowest level since 2014 as Americans contend with inflation and rising fuel prices [CNBC]

4. A Keynes bot can tell us what John Maynard Keynes might have said about artificial intelligence [The New York Times]

5. OpenAI CEO says the “world should accept some bad things happening” in exchange for the benefits of artificial intelligence [Politico]

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Oktoberfest welcomes millions of visitors each year, and yet only six breweries are allowed to pour at the world’s largest folk festival. Even the prince whose family started it can’t get his beer served under the big tent. This week’s newsletter uses Munich’s beer lineup to explain how cartels work and why government-backed ones seem to last for generations.

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Oktoberfest wrapped up this past weekend, and Munich is cleaning up after roughly 7 million visitors stopped by the world’s largest folk festival. It shouldn’t take them too long; the city has been throwing this party since 1810.

If you’re curious, visitors to this year’s event paid between €14.80 and €15.90 for a one-liter mug of beer, known as a Maß. That price has been climbing faster than German paychecks for the past few decades, but perhaps the bigger surprise for newcomers may have been how few choices they had. Bavaria had 588 breweries in 2025, more than any other German state. Only six are allowed to pour at Oktoberfest: Hofbräu, Augustiner, Hacker-Pschorr, Löwenbräu, Paulaner and Spaten. It’s the same six as last year and the same six for generations.

To join them, a brewery must brew within Munich city limits and follow the Munich Purity Law of 1487. There’s also a third condition that inspired this week’s newsletter: the brewery also needs the blessing of the Munich city council, or enough signatures to force a citywide referendum.

That arrangement now faces two challenges, one in court and one at the ballot box. To see how tightly the door has been shut, let’s start with the family that threw the first party.

Even the Guy Whose Family Invented It Can’t Get In

Oktoberfest began as a royal family party. On October 12, 1810, Crown Prince Ludwig married Princess Therese, and Munich invited its citizens to celebrate on the fields outside the city gates. The festivities went so well that the city did it again the next year, and every year after. The royal fingerprints are still present at the event. Hofbräu, one of the big six, began in 1589 as the royal court brewery and is still owned by the state of Bavaria.

The royal family itself, however, is currently on the outside. Prince Luitpold of Bavaria is a direct descendant of the groom who started it all, and currently runs his family’s König Ludwig brewery. His beer is Bavarian and follows the purity law, but the brewery sits outside Munich, so it can’t pour at the festival. Luitpold spent years trying to win a license before giving up and publicly questioning whether the city’s rules would hold up under antitrust law. Shut out of his ancestors’ party, he started his own this fall in Cologne. It turns out royalty is no workaround for barriers to entry.

At least Luitpold’s exclusion has a rulebook explanation: his brewery is in the wrong place. There are currently two people challenging the stronghold the big breweries have over the giant tents that serve thousands. One is the CEO of a Munich Restaurant that has been operating one of the 440-seat tents at the festival, but who was turned down when he bid for one of the giant tents operated by the big six. He’s suing to open the bidding to applicants across the European Union. Giesinger Bräu was founded in a garage in 2006, and now produces about 1% of Munich’s beer. It brews inside the city, follows the purity law, but is pushing for entry through a citizen referendum.

So we have a Munich tent operator and a Munich brewery that say they meet the formal requirements and still can’t get in. Economics has a framework for that kind of mismatch, and it starts with a word you’ve probably heard before.

What Textbooks Say About Cartels

Even if you’ve never taken an economics course, you probably know the basics. A cartel is an agreement among competing firms to limit competition. Without that agreement, rivals would undercut each other on price to win customers. A cartel gets everyone to call that off. Usually, each member agrees to produce less than it otherwise would, because fewer products on the market means higher prices. The members then split the profits that come from behaving like one big monopoly instead of a group of rivals.

The most well-known example is probably OPEC, which sets production targets for its member countries to influence global oil prices. But cartels have reached into a wide variety of industries, from diamonds to vitamins.

It’s easy to see how the members come out ahead while everyone else comes out behind. Customers end up paying more, but the damage goes beyond the extra profit sellers earn. Some people who would have happily bought at a competitive price don’t buy at all, so sales that would have benefited both sides never happen. That value doesn’t go to the cartel or to anyone else. It simply disappears, which leaves society as a whole worse off as a whole.

The good news is that cartels tend to fall apart. Each member has an incentive to cheat by producing a bit more than its allotment and pocketing the extra profit. If enough members do this, the cartel collapses. But that’s what makes Oktoberfest a bit strange. A typical cartel survives only as long as its members can keep each other in line. The Oktoberfest six have kept outsiders away for generations without any visible effort. Something else is holding this one together.

Why This One Is Different

That something is the city of Munich. The rules about who pours at Oktoberfest are written into the festival’s operating regulations, which the city council re-adopts every year. Adding a seventh brewery would mean changing them, and according to the city, brewery admissions simply follow a practice built up over decades. That tradition has generated millions in profits for the group.

Normally, big profits attract newcomers who compete those profits away. Barriers to entry are the obstacles that stop that from happening. Some are natural, like huge startup costs or economies of scale. Others are artificial, created by regulation or policy. Oktoberfest’s barriers are mostly artificial, and they’re steep.

Economists have a term for when a regulator ends up serving the industry it oversees: regulatory capture. There’s no hard evidence of it in Munich, but there are reasons to ask. The six incumbents share a trade association, the Association of Munich Brewers. A former Wiesn chief once said the real danger of admitting Giesinger was that other breweries might follow, which sounds like a strange concern for an official running a public festival. The current Wiesn chief says no one is being blocked and points out that Giesinger has never formally applied.

The economics works the same way whether you call it capture or tradition. When the government guards the door, the cartel doesn’t have to.

Final Thoughts

Munich isn’t the only government body to put its muscle behind a food cartel. Consider Switzerland, where the Swiss Cheese Union ran cheese production from 1914 to 1999. It set milk prices, dictated quotas, and shrank a tradition of more than 1,000 varieties down to seven approved types. At the peak of the fondue era in the 1970s, the government reportedly spent more subsidizing cheese than equipping its military.

Then there’s Quebec, which produces the majority of the world’s maple syrup. Since 2004, the province’s producers’ federation, known as the Quebec Maple Syrup Producers, has run a quota system controlling production. Anyone selling in bulk must contribute part of their crop to a global strategic maple syrup reserve, and anyone caught producing beyond their quota faces a penalty. The reserve is so valuable that thieves stole C$18 million worth of syrup from it in 2012.

These cartels all have something in common that explains why they are able to last so long. When the government enforces the rules, members don’t need to worry about anyone cheating. That’s what makes this year’s legal challenges interesting. Munich’s new mayor has said any Munich brewery is free to apply, but the fights are still taking place in courtrooms and at the ballot box instead of under the big tents.

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Six breweries have effectively decided what people get to drink at Oktoberfest, but you have the power to decide who reads this next. Share it with a friend. After all, economics is also more fun with company!

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• Augustiner is Munich’s oldest brewery, founded in 1328, and its beer is famously still tapped from wooden barrels at Oktoberfest [Augustiner Bräu]

• Munich’s 1487 purity law predates Germany’s famous one that limits beer to barley, hops, and water [Hofbräuhaus]

• It’s been 216 years since the first event, but we’ve only celebrated the 191st Oktoberfest because of war, cholera outbreaks, and COVID [Oktoberfest]

• “Oktoberfest beer” has been legally protected across the EU since 2022 with the EU’s protected geographical indication noting that it must be brewed under the purity law using deep Munich water from the brewery’s own well [Food & Wine]

Hi y’all! Here are five stories from this week that contained some neat applications of economic principles or are related to teaching:

1. Raiders quarterback Fernando Mendoza hasn’t taken a snap in the NFL yet, but the first pick in this year’s draft is offering up financial advice to Gen Z [Bleacher Report]

2. White House preparing plan for 90-day diesel exports ban [Politico]

3. The U.S. may have less of an actual shortage of licensed nurses than a shortage of nurses who are willing to work in bedside jobs that have become increasingly demanding [Time]

4. H&M discovers it’s tough to make money selling used dresses for $5 [Tech Times]

5. A $5000 bike shows why it’s hard to build in America [Bloomberg | Archive]

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When a recruiter’s viral TikTok warned Gen Z job seekers to leave their iced coffee outside the interview room, the internet split into two camps. This week’s article highlights how both sides are describing the same Nobel Prize-winning idea without realizing it. That the same drink can send completely different signals depending on who’s doing the hiring. Check out the full piece to find out what signaling theory says about the debate, and whether that cold brew should make it past the parking lot.

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The internet is fighting about coffee again. This time, a veteran recruiter posted a TikTok criticizing Gen Z candidates who show up to interviews holding iced coffee. She argued the drink makes the interview look like just another stop on a list of errands.

The video took off across TikTok and LinkedIn, and thousands of recruiters, career coaches, and job seekers weighed in. They were sharply split on whether a cold brew is unprofessional or completely harmless.

One side says professional settings come with expectations, whether you like them or not. The other says judging a candidate by their drink says more about the employer than the applicant. Here’s the funny part: both sides are arguing about the same economic idea. They just don’t realize it.

What Interviewers Actually Know About You

Before we judge the coffee, let’s ask why companies make you interview at all. The short answer is that they’re guessing. An employer wants to know whether you’re reliable, sharp, and serious about the job. Asking you directly doesn’t help much, because every candidate says yes, including the ones who shouldn’t. Economists call this information asymmetry. You know whether you’re a hard worker, but the interviewer may have to wait months to find out.

An employer will work hard to close that gap when a bad choice is expensive. For a part-time retail job, a half-hour conversation is probably enough. Training is quick, and a bad hire is easy to replace. But a salaried job for a new grad? A company may spend months training you, which makes it a much bigger bet. That’s why fresh graduates go through recruiter screens, skills tests, and several rounds of interviews before getting an offer. GenAI has made it easier to apply for jobs, so employers are adding more hurdles to narrow the pool. Heck, just sticking with the process through multiple rounds shows how much you want the job.

Whether the interview lasts thirty minutes or a full day, the interviewer is doing the same thing: filling in what they can’t see with assumptions based on what they can. Your résumé, your handshake, your outfit, and how you handle a question you didn’t expect all get treated as evidence of something deeper. It turns out that economists have a name for that kind of evidence.

The Economics of Signals

Let’s meet our economist, Michael Spence. He shared the 2001 Nobel Prize for explaining how job markets deal with information asymmetry using signals. Employers can’t see the traits they deeply care about, so they have to infer them based on what workers do show them.

There’s a catch, though. Signals are really informative whenever they are costly to fake. If anyone could send it for free, it wouldn’t tell an employer anything.

A college degree is a classic example. Yes, you learn real skills in college, but a degree can still be valuable even if you didn’t learn anything. Getting through four years of deadlines is hard unless you’re persistent and conscientious. The diploma separates people who have those traits from people who don’t. You can see this best exemplified by a phenomenon known as the “sheepskin effect.” The year you graduate raises your earnings more than the year before it, even though you don’t learn all that much more in your senior year compared to your junior year.

You can see other signals all over the workplace once you start looking. A wedding ring is relatively cheap, but the commitment it represents isn’t. Of course, the signal it sends may differ if it’s coming from a man rather than from a woman. The way you dress also sends a signal. A sharp suit tells an interviewer you know the professional norms and took the trouble to follow them.

But what about the iced coffee?

@savconsidineDuh I’m bringing an iced coffee to an interview (this is my take on a trend and all hypothetical)

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When Signals Break Down

Wearing a suit in an office setting or for a professional interview works as a signal because almost everyone in those contexts agrees on what it means. The iced coffee fight is really a disagreement about what the signal means, and the answer depends on who you ask.

To a lot of older Millennial and Gen X hiring managers, the coffee is a red flag. The critics usually argue that your iced coffee shows one of two things: either you don’t know the norm, or you know it and don’t care. In a formal interview, neither looks great.

To a lot of Gen Z candidates, it’s just coffee. They aren’t saying professionalism doesn’t matter. They’re saying a latte doesn’t measure it. Leaving the coffee in the car costs a brilliant candidate exactly as much as a mediocre one, so it can’t help an employer tell them apart. But it might show whether someone taught you this particular unwritten rule.

Part of the gap may simply be habit. Americans under 30 were more than twice as likely as those 65 and older to say they love iced coffee.

A signal that means different things to the sender and the receiver is a poor signal. Unfortunately for Gen Z, the ones interpreting the signal are the ones running the interview. It doesn’t help that recent grads are facing one of the toughest entry-level job markets in decades. Employers have plenty of applicants and little reason to question their assumptions. That’s why even people who think the rule is silly still tell candidates to leave the drink behind.

But norms aren’t laws of physics. They last because most people follow them, and they fade once enough people stop. A suit used to be the standard outfit in almost every office job. Then business casual spread, and in plenty of offices today, a full suit can look like you’re trying too hard. The signal hasn’t disappeared, but its meaning has changed.

The same thing will probably happen with interview etiquette. After all, Gen Z is a growing share of the workforce and is already moving into management. As they take over the interviewer’s chair, the coffee rule will likely loosen. Those of us in charge of hiring right now can complain all we want, but we’re probably the ones who’ll have to adjust.

Final Thoughts

So should you bring it or not? Signaling theory won’t give you an answer, but it gives you the insight to ask what the signal says and who’s reading it.

At a startup or creative agency, the norm may already have shifted. In that context, showing that you understand your surroundings could be exactly what the employer wants to see.

But in a buttoned-up Fortune 500 interview, the old norm is probably still strong enough that breaking it sends the wrong message. Finishing your drink in the parking lot costs you five minutes. Bringing it inside could cost you the job. No one knows when the norm will fully change, but until it does, leave it in the car.

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• The average cost for each new hire in a non-executive role was $5,475 [Society for Human Resource Management]

• Employment among workers aged 22–25 in highly AI-exposed jobs is ~19% below where it is in less-exposed occupations [Stanford Digital Economy Lab]

• Applicants per posting roughly doubled from about 46 in 2021 to about 95 in 2025 [Bamboo HR]

• Gen Z workers make up almost a fifth (18%) of the labor force, with Baby Boomers comprising 15% [U.S. Department of Labor]

• About 1 in 10 U.S. managers now belongs to Gen Z [Glassdoor]

Hi y’all! Here are five stories from this week that contained some neat applications of economic principles or are related to teaching:

1. Your phone case may be hurting your image at work [Business Insider | Archive]

2. Poland lost $424 million trying to buy Venezuelan oil with crypto [Yahoo! Finance]

3. Singapore is paying its people to read [CNN]

4. Costco has hiked the price of its private label motor oil and capped the amount that customers may buy [Associated Press]

5. DraftKings allegedly used AI to identify gamblers that were likeliest to lose and then served them with additional promotions and bonuses [The New York Times]

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Diesel just hit a record $6 a gallon after a drone strike hit a key Saudi pipeline, but the price hike is only half the story. Economists have a name for why pump prices shoot up in days but crawl back down over weeks, and this week’s piece breaks down what to expect (and why) as the crisis eases.

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If you’ve got a long commute to school or work, the past few months have been a real challenge. Fuel prices have surged globally, while actual rockets continue to fly over the Middle East. Just last week, a drone strike hit Saudi Arabia’s East-West oil pipeline, the backup route the kingdom had been using since the Strait of Hormuz got tangled up in the ongoing U.S.-Iran war. Brent crude rocketed above $100 a barrel, and diesel hit a record $6 a gallon in the United States.

Politicians want us to “hang in there,” but no one can say for sure whether the pain at the pump will last a few more weeks or several more months. It’s a familiar story any time there’s a conflict in the Middle East: prices shoot up fast, but then take their sweet time coming back down. That lopsidedness response isn’t random. It also isn’t new. There’s a technical name for this phenomenon, but its nickname is a whole lot more memorable.

From a Saudi Pipeline to Main Street

You may not think the price of diesel matters if you aren’t filling up your tank, but you should still care that it’s hit a record high. Diesel powers almost everything we own before we own it. It fuels the farm equipment harvesting the food you’ll put on your table in a few weeks, as well as the semi-trailer trucks that get it to the store alongside everything else in your cart at Walmart and Target. When diesel gets more expensive, those costs will eventually show up in the price of everything else you do purchase.

But the fuel we’re buying to fill up our tanks gets more expensive long before the oil even arrives at the refinery to be processed and shipped out to your neighborhood fueling station. So how does a pipeline explosion 7,000 miles away increase the price we pay at our hometown pump within a few days?

The United States is the world’s largest oil producer, accounting for nearly 22% of global output. Saudi Arabia comes in second, drilling nearly 11%. But oil doesn’t trade like a local product. The U.S. may produce the most barrels per day, but it still imports about 8.51 million barrels of petroleum every day from 86 countries.

Oil trades on a global market, priced on crude futures markets that run nearly around the clock. Those futures markets can reprice within minutes, even if a single barrel has actually failed to arrive where it’s supposed to. A disruption to Saudi supply will remove Saudi barrels from Saudi customers, but it will also tighten the entire pool everyone in the world draws from, U.S. drivers included.

Prices Shoot Up Like a Rocket

This behavior is the rocket in our analogy. When crude spikes, retail gas and diesel respond almost instantly. That spike could come from a pipeline strike, a Strait of Hormuz closure, an OPEC cut, or a hurricane through the Gulf Coast. The triggers may all be different, but the speed of the response is pretty much the same. It’s all about expectations. A gas station owner knows their next delivery will cost more, so they raise today’s price to protect the margin on tomorrow’s inventory. It doesn’t matter that the fuel sitting in the ground was bought last week at a lower price. All they care about is what it will cost them to fill the tanks back up.

We can see this play out clearly in the most recent data we have: Brent went from roughly $91 a barrel in August to above $108 within days of the strike, an 18% jump. U.S. diesel followed within about 72 hours, crossing $6 a gallon nationally for the first time ever.

Of course, it’s not just station owners feeling the squeeze. Truckers, farmers, and everyone else further down the supply chain are watching the same numbers, with a little more flexibility but the same question: how long can they absorb the higher cost before they have to pass it along?

Prices Fall Like a Feather

Now, for the back half of our story that we haven’t seen yet. We’re still living in the rocket phase, but we can predict what will come next. This has happened plenty of times before. There’s no reason to believe this time will be different.

Let’s go back just a few years to 2022, when gas prices rose sharply following Russia’s invasion of Ukraine. As the cost of oil started coming down, President Biden publicly called out gas station owners, urging them to lower their prices to match the lower costs they were now paying for crude. It was a moment of real public frustration, but it also nicely captured the back half of our analogy. Crude prices had started falling, but the price at the pump wasn’t falling as fast as it had increased. No tweet from the president was going to speed that up.

That’s the pattern gas and diesel are likely to follow. Saudi Arabia has already begun rerouting exports through its eastern Persian Gulf ports, and diplomatic signals suggest the worst may be behind us. Brent has already come off its $108 peak and is currently down to around $95. But we won’t see diesel prices fall nearly as fast as they rose. Those will drift downward almost reluctantly over the coming weeks. A lot like a feather.

Retailers may shoot prices up in anticipation of rising costs, but they have no matching incentive to rush prices back down. They’ll keep prices elevated until competition forces their hand and drivers stop pulling up to the pump to pay.

Why the Asymmetry Exists

This rocket-and-feather phenomenon is more formally known as asymmetric price transmission. I think the colorful nickname is a lot easier to remember. It was coined by Robert Bacon in the 1990s, and has been confirmed by dozens of studies since.

We’ve touched on some of the causes for the feather-like return, but none of them are conspiratorial in nautre. Economists have broadly identified three forces that are driving the asymmetric response, and they reinforce each other:

1. Inventory repricing: a fuel station that bought fuel at a high price won’t sell it at a loss just because crude prices have dropped. It will wait for that inventory to turn over before passing savings along to customers.

2. Search costs: rising prices frustrate drivers, which causes them to start hunting for the lowest price. This initially limits how high any single station can push prices up, but that vigilance disappears once prices start falling. As a result, the competitive pressure to cut prices quickly also disappears.

3. Margin recovery: fuel station owners that got squeezed during the spike may not be able to raise prices as quickly as their wholesale costs climbed. The decline period is a chance to quietly rebuild what they lost, but that means prices are held a little higher than strictly necessary.

At first blush, this seems to contradict the notion that market dynamics are beyond the control of a handful of companies or the Commander in Chief. You wouldn’t be the first to question the feather-like response. However, a team of economists confirmed the pattern in U.S. gasoline markets in a landmark 1997 study, and it’s since shown up in heating oil, airline fuel surcharges, and even grocery products with commodity inputs.

Final Thoughts

Lately, more people are asking whether these are predictable patterns retailers fall into or whether they’ve become patterns retailers learn to lean on. Some believe there are signs that companies have simply stopped cutting prices when costs fall, choosing wider margins instead.

Just a few years ago, prices climbed as the U.S. and countries around the world experienced some of the highest inflation in decades. Some companies discovered they could raise prices sharply and lose only a little volume in return. Some people called that profiteering, or “greedflation.” Others just called it good business.

Consumers complained about the price increases during that stretch, but kept buying for the most part. Whether companies can hold onto wider margins now that costs are easing will depend, in part, on whether consumers start to push back. Politicians are asking us to hold out a little longer, and I’m willing to bet that oil and gas companies are quietly hoping we do exactly that. Hopefully, the feathers start falling, but we will inevitably all have to wait and see how long it takes to land.

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Next time a headline sends oil prices flying, you’ll already know the script. Share this post with your friends so that they’re ready for the next one. There’s always a next one.

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• The United States is the world’s largest oil producer, extracting 21.91 million barrels of oil each day [U.S. Energy Information Administration]

• Diesel engines power approximately 75% of all farm equipment and heavy agricultural machinery, including tractors, harvesters, and irrigation pumps [Pickens Technical College]

• About 97% of all heavy-duty semi-trucks (Class 8) in the United States operate on diesel fuel [Food Logistics]

• Canada is by far the largest source of oil imports for the United States, providing over 50% to 60% of total foreign petroleum and crude oil [U.S. Energy Information Administration]

Hi y’all! Here are five stories from this week that contained some neat applications of economic principles or are related to teaching:

1. About 60% of Americans consider themselves “working class,” including some with college degrees and high incomes [Pew Research Center]

2. Revenue in the private security sector climbed 17% over the past decade to above $50 billion in 2025 [CNBC]

3. According to the OECD’s education report, students who use AI for schoolwork underperform those who don’t by a significant amount [Yahoo! Finance]

4. Snoop Dogg is hiring an international ice cream taster who will be paid $10k a month [NBC News]

5. Satisfaction with K-12 education hits new low [Gallup]

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Last year’s US Open set a record at the concession stand, where a $23 cocktail called the Honey Deuce pulled in over $17 million in sales. Once the numbers are crunched for this year, tournament organizers are hoping for another record breaking year. But why has a drink that has barely changed over the past 20 years suddenly become a viral phenomenon the past few years. It turns out that an equally old economic theory explains a lot more than just tennis.

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The US Open is officially over, which means my feed will be free of Honey Deuce cups for another year. Elena Rybakina and Alexander Zverev will go down as this year’s champions, but they weren’t the only big winners. The tournament’s famous cocktail had a pretty good run too. Most of the articles I’ve seen over the past two weeks have focused on how expensive the drink is, but social media doesn’t seem to suggest the people in the venue care all that much. Heck, some have even said it was cheaper than they expected.

The Honey Deuce debuted nearly 20 years ago at $12. If the price had only kept pace with inflation, it would sit at around $19 today. Instead, it currently costs $23, and the tournament just wrapped up another record year for it anyway. One of the USTA’s own executives put it bluntly: “I’d be lying if I said I had the foresight to think that 25,000 was going to turn into 800,000.”

The Honey Deuce has been a genuine phenomenon for the last few years, but it wasn’t nearly this big a deal during its first decade at the tournament. So what’s actually changed?

From 25,000 Cups to Nearly a Million

The Honey Deuce sold out when it first appeared at the US Open back in 2007. At the time, organizers only had enough prepared for 25,000 cups. Fast forward to 2022, and the tournament was selling more than 400,000 units. Last year, the tournament sold 738,459 drinks. At $23 a pop, the tournament brought in roughly $17 million last year. That’s more than the two tournament winners earn combined.

The USTA hasn’t raised the drinks’ price this year, but they have ordered more cups in anticipation of another record-breaking year. We should find out any day now whether their bet looks conservative or exactly right.

But here’s what jumped out to me while digging into the sales data, and what ultimately led to this article: for its first fifteen years, Honey Deuce sales grew roughly in step with attendance. But since the pandemic, sales have taken off. It’s grown far more than the crowds, but why?

What Is the Experience Economy?

Let’s pause for a moment and talk about what makes sporting events and even the Honey Deuce unique. Experience goods are products or services that are hard to accurately judge before you’ve purchased them. A match at the US Open fits this nicely, since you don’t really know what you’re getting until you’ve arrived. Will it be a five-set classic or a blowout? Will your favorite player show up in top form, or crumble in the 95-degree heat? You only learn the value of your purchase after you’ve paid and watched it play out.

This is where the experience economy framework comes in. The argument goes that businesses increasingly succeed by orchestrating memorable events around whatever they’re selling, until the memory itself becomes the product. If the quality of any individual match is uncertain, the tournament needs something else to get people through the gates for the early rounds. It needs something reliably great that guarantees a good memory no matter the scoreline.

Enter the Honey Deuce: a social media sensation generating cultural buzz that sometimes rivals the tennis itself. The cocktail debuted almost 20 years ago, and social media has been around just as long. So why is it only now, two decades in, that Honey Deuce sales are exploding?

So, Why Now?

Consumer spending data offers a place to start. Pandemic lockdowns meant drastically reduced spending for a lot of people. The personal savings rate spiked to nearly 25% in mid-2020, compared with a pre-pandemic average of about 6%. Some estimates suggest U.S. households built up over $2 trillion in “excess savings.” Once those stay-at-home restrictions were lifted, a lot of that money went straight into concerts, travel, and live events. That “revenge spending” benefited the tournament nicely. Profits nearly doubled, from $157 million before the pandemic to $277 million last year.

Honey Deuce sales managed to grow by more than double. Social media amplified people’s desire to broadcast the experiences that all that pent-up demand was now funding. Since you can only get the drink at Flushing Meadows during the tournament, showing up with one in hand became its own small proof that you were back out in the world. A similar drink at a bar might run closer to $10. But in a stadium packed with fans, at one of the world’s marquee sporting events, in a commemorative cup, it’s $23. The drink is the same at both venues, but the experience is vastly different.

Final Thoughts

The US Open isn’t the only tournament to figure that out. The Mint Julep has been the Kentucky Derby’s official drink since the 1930s, and Wimbledon’s Pimm’s Cup has been around since the 1970s. Both were built on the same logic decades before the Honey Deuce showed up, but neither has matched its viral reach. Perhaps it’s because the Open’s crowd skews younger and more online, which is exactly the ingredient that turns a good concession-stand strategy into a $17-million phenomenon.

The drink is more than just a cocktail in a commemorative glass. The product is really just proof of presence at a premium cultural moment. It’s something you can broadcast to your entire network, long after the tournament ends. Call it irrational spending if you want, but it’s really just the experience economy doing exactly what it was theorized to do almost thirty years ago.

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One more thing: this newsletter is an experience good, too. You can’t actually know if this newsletter is worth your time until you’ve read it. Since you’ve made it this far, I think it’s safe to say the verdict is in. Your friends, though? They’re still stuck guessing. Forward this along and let them find out for themselves.

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• 8,000 cases of honeydew melons were trucked from California to New York for the US Open [Cascade PBS]

• The winners of the 2026 US Open men’s and women’s singles titles each make $5,500,000 [People Magazine]

• On resale sites like eBay, single cups can be listed for $10- $20, while a set of six can go for $100 [ESPN]

• Personal savings as a percentage of disposable personal income is currently at 3.0%. [U.S. Bureau of Economic Analysis via FRED]

• There were an estimated 905,255 people in attendance for the main draws of singles and men’s and women’s doubles in 2025 [Forbes]

Hi y’all! Here are five stories from this week that contained some neat applications of economic principles or are related to teaching:

1. The author of “Rich Dad, Poor Dad” is in debt to the tune of $1.2 billion [Vanity Fair | Archive]

2. Party balloons could become a luxury as the Iran war spurs a helium shortage [MarketWatch]

3. Americans spend 14% of their downtime feeling guilty about relaxing instead of being productive, a phenomenon known as “leisure guilt” [Inc]

4. Demand for engagement rings gave thousands steady work at De Beers, but weak sales and lab-grown stones are taking it away [The Wall Street Journal 🔐]

5. US Open match halted due to cannabis smell [The Guardian]

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America’s busiest airports were mostly built before 1970, but a new Virginia airport located 40 miles from downtown DC shows exactly why that hasn’t changed. This week’s piece traces the last time a major U.S. city actually built a second airport, and the surprisingly specific reason it’s been over 50 years since.

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If you’ve got a trip to DC planned, you’ll soon have one more airport option. It’s probably not the pick for an easy ride downtown to visit the Washington Monument, but it might become your favorite if you’ve got business on the southwest side of the city, or you’re just tired of Dulles’s ballooning prices.

Last week, the airport formerly known as Manassas Regional earned the necessary FAA certifications required to put a jet bridge next to a runway. Washington Manassas Airport is a general-aviation field about 40 miles from downtown DC, currently home to flight schools and private planes. It’s in the middle of major renovations meant to get it ready for commercial service by the end of 2027.

Forty miles seems like a long drive after landing in a “DC airport,” but I was more intrigued by whether the metro area is even large enough to support another commercial airport alongside Dulles, Reagan National, and BWI. Assuming that it is, why is the next one sitting in the exurbs instead of somewhere closer to the city center?

That curiosity led me down a rabbit hole looking for the last time a major American city actually added a legitimate, additional airport to solve its capacity problem. It turns out it’s been a while.

A Brief History Lesson on New Airports

A lot of airports follow the same process as Washington Manassas by converting a general-aviation field into a commercial operation. Completely brand-new commercial airports, known as greenfield construction, are much rarer in the United States, and we’ll soon see why. Either path could reasonably count as “new,” so I set a couple of additional conditions to narrow the search.

The first was about the size of the metro area. Plenty of smaller cities have built new airports as they’ve grown, but they were never trying to solve a big-city capacity problem. Northwest Florida Beaches International opened in 2010 as genuinely new construction, but it immediately replaced Panama City’s previous airport. With a metro area of about 200,000 people, there was never a case for two airports anyway.

The second condition was that the new airport had to be large enough to actually relieve congestion at its metro’s existing airports. That rules out locations like McKinney National, 30 minutes north of Dallas, which will start accepting commercial service in November. The issue? It currently hosts one airline with five leisure routes. That’s more of a regional outpost, not an additional hub for the millions flying in and out of North Texas.

And if you thought I’d forgotten Denver International, which opened in 1995, think again. It’s unquestionably a major airport in a major metro, but it wasn’t built to serve as a second airport for the city. It replaced Stapleton, which had become boxed in by the city that grew around it. By the 1980s, there was no viable plan to expand its runways, so they built out into the plains. Stapleton closed the same day Denver opened.

From what I can tell, the last time a major metro genuinely added a new, major airport to relieve capacity was Dallas/Fort Worth International. Even that one barely makes the cut. By the early 1960s, Dallas’s Love Field was running out of runway and gate space. Federal regulators pushed Dallas and Fort Worth into a joint solution instead of letting each city solve its own problem. They wanted to see a shared airport that would replace both Love Field’s commercial service and Fort Worth’s existing airport.

DFW broke ground in 1969 and opened in 1974, and most airlines followed the plan to leave Love Field behind. But Southwest Airlines refused to leave. Once deregulation let it fly beyond Texas in 1978, Congress even went so far as to pass legislation restricting flights out of Love Field for the next 35 years, specifically to protect DFW from competition.

It turns out that Dallas barely made the cut only because Southwest refused to leave and survived a law written specifically to stop it. The law would eventually be repealed in 2014, but Love Field is easily a legitimate second airport for the city. Maybe the better read is how the most recent major metro that ended up with a genuine additional airport got there by accident. Since DFW broke ground, U.S. air travel has exploded. So, where are all the new airports?

Several of the country’s busiest airports were built nearly a century ago, and some are so constrained that even planned improvements wouldn’t fix their capacity issues. Of today’s 20 busiest U.S. airports, nine are projected to need more capacity than any currently planned runway or technology upgrade can provide.

But knowing that air travel has grown nearly 50 times since the 1950s and almost half the country’s busiest airports are already maxed out doesn’t explain why there hasn’t been a serious effort to fix it. That turns out to be less a data question than an economics one.

Building Beat Renovating, Until It Didn’t

This might look like a hunt for an answer to a trivia question, but there’s a real economics explanation underneath it. A constrained metro area has two ways to add airport capacity: build a new one, or expand the one it’s got. Economists call this decision-making at the extensive margin versus the intensive margin. It’s the same choice a company faces when it’s short on capacity and has to decide between opening a second location across town or just running the existing one harder. Running it harder is cheap and easy to reverse, but hits diminishing returns fast. A second facility costs a fortune up front, but can end up cheaper in the long run if demand keeps growing.

For the first half of the twentieth century, American cities mostly chose the extensive margin. Chicago Midway opened in 1927, but the city stood up an entirely new airport a dozen miles away when jets outgrew its short runways in the 1950s. By the early 1960s, O’Hare had taken over as the region’s primary hub, while Midway kept operating alongside it. Land was cheap, and nobody outside the immediate neighborhood had much legal standing to stop you. Chicago has been floating the idea of a third airport since the 1990s, but the proposed site has been controversial enough that it’s never broken ground. More on that in a second.

DC has its own version of this story sitting under our noses. Reagan National is wedged between the Potomac River and a full residential grid, with no room left to extend a runway. On top of the physical constraint, federal rules cap how many flights can use the airport each hour and how far nonstop flights can go. It’s essentially a push to grow Dulles instead. Sound familiar?

Seattle is living through a similar squeeze today, and its recent history shows just how hard “build new” has become even when the need is obvious. Seattle-Tacoma is in the middle of a $1-billion-plus expansion, and Paine Field up in Everett is separately expanding its own terminal. Even so, the region is still projected to fall short of demand by mid-century. Washington state spent two years searching for a third-airport site to close that gap, but every option it identified fell through.

Building new airports was fairly easy through the first half of the century. Then, seemingly overnight, cities switched to expansion instead. It turns out that the timing is almost too perfect to be a coincidence. Remember how DFW broke ground back in 1969? Well, the National Environmental Policy Act, which requires federal environmental review for major infrastructure, was signed on January 1, 1970. Since then, most U.S. airports have opted for expanded runways, bigger terminals, and brand-new concourses. Cities have rarely picked a new plot of land and started over.

The bigger pattern

That regulatory shift hasn’t been contained to airports. A pair of economists went looking for an explanation for why the cost of building one mile of interstate highway roughly tripled, in real dollars, between the 1960s and the 1980s. They ruled out the obvious suspects (labor, materials, and tougher terrain) and traced it instead to a rise in what they call “citizen voice”: more lawsuits, more mandatory environmental review, more people with legal standing to hold up a project they didn’t want in their backyard. The inflection point, once again, lands in the early 1970s, right where NEPA does.

That explanation makes Denver’s airport stop looking like a quirky outlier and start looking like a logical response. The city couldn’t expand Stapleton, but selecting a spot 25 miles from downtown meant far less friction to deal with. Building new usually means a fresh set of neighbors with legal rights to slow you down for years. However, you don’t have nearly as many neighbors to deal with whenever you buy up more land than the city boundaries of Boston, Miami, or San Francisco.

If this were simply how airport economics worked everywhere, you’d expect the same slowdown globally. Beijing opened an entirely new second major airport in 2019, while its original airport kept running right alongside it. Mexico City opened a brand-new third airport in 2022. Neither example means overriding local objections is a better way to run a country. The U.S. gives affected communities real legal standing to object for good reasons. Both examples are merely to rule out the idea that “build new” is off the table because of costs or logistics.

Final Thoughts

This brings us back to Manassas. Unlike Seattle or Reagan National, Northern Virginia doesn’t have the same geography problem forcing its hand. It has instead opted for the path of least resistance: a general-aviation field far enough from anyone influential to object, and close enough to the interstate to market itself as “DC” anyway.

I can share some personal experiences with how this might play out for travel, and it isn’t flattering. Several years ago, I booked a cheap flight to “Washington DC” for a conference, but I didn’t check how close the airport actually was. Shortly after the flight landed in Baltimore, I also learned how to board a train for the first time, which is not nearly as intuitive as you think if you’ve grown up with trains and subways your whole life. I clearly didn’t learn my lesson on checking airport locations because I made nearly the same mistake the next year when I booked a “cheap flight to Paris” that landed 50-plus miles from where my hotel was located. I got to figure out how their train system worked, but this time in French!

Baltimore is a real city that can support its own airport, but Beauvais can’t, and exists purely to catch tourist demand for Paris on the cheap. It’s built far outside the city and lets its name do the marketing. Sound familiar? It’s a good deal for the airport operator, but far from ideal for travelers standing in a terminal an hour from where they actually want to be. No offense, Manassas.

But this is all really circling back to the original question I was hoping to arrive at. America hasn’t lost the ability to build new airports, but it has decided over and over again since the 1970s that the cheapest place to build them is far away from people who might object, even if that isn’t an ideal location to serve a market. Denver bought 53 square miles to get permanent distance from just about everyone, while Manassas is betting that being 40 miles away is fine for travelers and won’t offend the 44,000 people who live there won’t object.

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This newsletter doesn’t have a capacity problem. I’ve got plenty of room for more readers, no NEPA review needed. If you liked this, forward it to someone who’d argue with you about it.

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• The population of Manassas, Virginia, is estimated to be 44,332 [U.S. Census Bureau]

• The North­west Flori­da Beach­es Inter­na­tion­al Air­port offi­cial­ly opened on May 23, 2010 as the first inter­na­tion­al air­port built in the Unit­ed States post-Sep­tem­ber 11 [Northwest Florida Beaches International Airport]

• Hartsfield–Jackson began with a five-year, rent-free lease on 287 acres that was an abandoned auto racetrack named The Atlanta Speedway [Hartsfield-Jackson Atlanta International Airport]

• College Park Airport in Maryland is the oldest continuously operated airport in the United States and the world, established in 1909 [National Park Service]

• Nearly 1-in-5 flights across America’s 10 largest carriers have been delayed so far in 2026 [Bureau of Transportation Statistics]

Hi y’all! Here are five stories from this week that contained some neat applications of economic principles or are related to teaching:

1. Dolly Parton streams spiked after her death, up 2,109% in the US and 1,280% globally [The Associated Press]

2. Bill Gates wants to see a robot tax and ‘Human Reserved’ jobs to mitigate harms from AI [TechCrunch]

3. Australia’s social media ban for teens is going, uh, pretty badly [Business Insider | Archive]

4. Nearly 1 in 3 workers think they could run the company better than their bosses [Inc]

5. America’s next grocery shock is brewing [Axios]

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A viral tweet accused readers of contradicting themselves if they believe more housing lowers prices, but don’t think more highway lanes will ease traffic. Turns out, it isn’t a contradiction. It comes down to one of economics’ more elegant (and underappreciated) ideas about how markets ration scarce goods. Read on to find out why one market has a fix baked in, and the other doesn’t.

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Every semester, I start class with a conversation about the power of prices as incentives. I run through a few favorite examples, like how paying students and teachers can improve learning or how a small fee on plastic bags can cut usage dramatically. I want my students to start thinking like economists, so I pair each example with a possible unintended consequence. Paying teachers based on student performance can tempt some to change answers for a bigger payout. A bag fee pushes some consumers toward buying the thicker, “reusable” plastic bags instead. Prices are great incentives, but they don’t always work the way policymakers design them.

I was preparing this year’s slides when I ran into a tweet that belonged in the same lecture, even though it wasn’t about either topic. It pointed out what looked like a genuine contradiction: how can someone believe that building more housing brings prices down, but also believe that adding more highway lanes won’t fix traffic? If supply works in one case, shouldn’t it also work in the other?

It fired up a lot of people online since it reads as a gotcha moment. The implication is that you should pick a lane. Either you believe in supply and demand, or you don’t. However, both beliefs are correct. There’s no contradiction here, just two markets that ration access in totally different ways.

How Housing Actually Works

Let’s start with housing, since it follows the supply and demand model neatly. Housing affordability in the United States is a major sore spot for Americans, and short of another major recession, there doesn’t seem to be any relief in sight. Theoretically, an increase in supply would lower prices and increase home ownership.

So what’s stopping that from happening? A lot actually. There are a lot of laws in place that quietly cap how much housing a city can build, even if demand is constantly increasing. Minimum lot sizes make it illegal to build anything smaller than a certain footprint. Parking minimums force developers to set aside space for cars instead of people. Zoning reserves entire neighborhoods for single-family homes only. Tack on permitting delays and expensive approval processes, and home buyers face consistently increasing prices.

In the housing market, price rations a scarce good. When prices rise, some people get priced out and relocate to more affordable options. When supply expands, prices soften, and more people can afford to stay or move in. The market adjusts on both sides of the story because the market price is constantly sending signals, and people respond by changing their behavior.

Over the past decade, Austin, Texas has been a pretty good real-world illustration. The city built aggressively, and rents actually fell despite strong demand. The pricing mechanism worked exactly as theorized.

Of course, not every city is ready for Austin-style sweeping reform. Smaller reforms can also help: legalizing accessory dwelling units or letting a single-family lot become a duplex or triplex. The details of how a city adds supply matter, but that’s not really the point of this article. The point is simply that when supply grows, prices respond.

Roads Are Different

That same price logic explains why so many homeowners show up in droves to fight zoning changes. Plenty of people see their homes as investments, and nobody wants to watch an investment shrink. Rising home prices are a reward for the people already inside the market as much as they ration access for people trying to get in.

Roads don’t offer that same reward, or that same punishment, because the price to drive on most highways is almost always zero. That’s the whole contradiction in the original post. Housing has a price mechanism, but highways don’t. A new home enters a market where price helps supply and demand meet. A new lane on the highway enters a market with no price at all, but there’s nothing to tell the drivers that capacity is scarce.

Economists have a name for that: induced demand. Drivers see a potential drop in travel time, which effectively decreases the cost of driving. As costs fall, more people enter the market. Instead of leaving early to dodge the traffic or avoiding that road altogether, they start driving again. The lane fills back up and the congestion returns.

The Fundamental Law of Road Congestion

A landmark paper examined highway construction across major U.S. metro areas and found that vehicle miles traveled increase in almost exact proportion to new lane-miles added. That means a 10% capacity increase produces roughly a 10% increase in driving. Any relief from new lanes tends to evaporate within three to five years. The finding has since been nicknamed the Fundamental Law of Road Congestion.

The highway fills back up with more cars through a few distinct channels. Existing residents who used to dodge the route or shift their schedule start driving it directly. New residents move to the area because the commute looks easier, which adds fresh demand on its own. Then, businesses relocate to take advantage of the perceived improvement in access, which brings freight trucks and employee traffic with them. Finally, people start running errands separately instead of bundling them into one trip. There’s no need to bundle it all together if an extra trip suddenly costs less time than it used to.

None of this is irrational behavior breaking our supply and demand model. In fact, the model is working exactly as it should. People and businesses see the new lane, and their demand for the road increases. Since there isn’t a price to slow that demand down, more people end up on the road. The unintended consequence ends up being the same congestion the lane was built to fix.

Final Thoughts

There’s actually only one assumption standing between these two markets: does a price exist to do the rationing? Housing has one, but most highways don’t. Some cities have taken up the call to give roads one anyway, through congestion pricing. The idea is to charge drivers more during peak hours and less during off-peak to mimic the same signal housing markets send on their own.

Stockholm, London, and Singapore have run versions of this for years. New York City kicked off its own Congestion Relief Zone tolling in Manhattan in January 2025. Despite sustained political and legal opposition, the program has stayed in effect, and the MTA has reported meaningfully fewer cars entering the zone. But putting a price on something people have always experienced as free is never just an economics problem.

“Build more” has become shorthand for a certain kind of optimism, popularized by Ezra Klein’s Abundance. The general premise is that a lot of society’s stuck problems are really supply problems in disguise, solvable if we’d just let ourselves build. Housing proves the case, but highways are the exception. An increase in supply only solves scarcity when there’s a price attached to ration it. Without one, more supply just invites more demand.

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This newsletter is also free, with no price rationing supply. But unlike a highway, we don’t have a capacity constraint. Share this one with a friend without worry of gridlock in your inbox next week. Consider it one of those rare cases where induced demand is exactly what we’re hoping for.

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• 58% of Americans say owning a home is a very or extremely important part of achieving the American Dream, including two-thirds of homeowners and half of renters [YouGov]

• Based on typical affordable housing development costs, one parking space per unit increases costs approximately 12.5%, and two parking spaces can increase costs by up to 25% [Urbanism Next - University of Oregon]

• The U.S. Interstate System is 46,876 miles long [US Department of Transportation]

• The widest section of highway in the U.S. is the Katy Freeway in Houston, Texas, which reaches up to 26 total lanes at its widest point [The New York Times]

• California requires highway expansion proposals to run through the UC Davis Induced Travel Calculator to estimate how much new driving a project would generate before it’s approved [California Department of Transportation]

Hi y’all! Here are five stories from this week that contained some neat applications of economic principles or are related to teaching:

1. As U.S.-Canada trade talks collapse, Carney says retaliatory tariffs will start after Labor Day [CNBC]

2. In a recent survey of US college students, 22% said they’ve changed their major or concentration because of job market worries [Axios]

3. Harvard Business School is charging $699 for an entrepreneurship bootcamp that includes AI avatars of its professors, which listen and give feedback to pitches [TechCrunch]

4. Universal Studios Hollywood built a “whisper quiet” ride to avoid angering nearby neighbors, but they didn’t fully account for the enthusiasm of the riders [The New York Times | Archive]

5. Several breakfast cereals are bringing back physical toys inside boxes in a bid to boost sales [Fast Company]

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NeeDoh squishies are the toy of the summer, but they’re almost impossible to find. Stores are rationing a product that isn’t even on the shelf. This week’s piece digs into why the company behind them won’t just raise the price to fix the shortage, and what a fixed-price toy craze can teach you about supply and demand. Read the full story to find out what’s really going on behind the empty shelf.

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I’ve heard about these viral NeeDoh squishies for the past few years, but I’ve never actually seen one in real life. I’ve seen the fidget spinners and pop-its that preceded them, but the squishy, dough-filled stress balls have somehow taken over American childhoods, backpacks, and TikTok.

So I went on a quest for a toy that’s been named a finalist for toy of the year. I’ve seen videos of parents hunting them the way Arnold Schwarzenegger hunted a Turboman action figure in Jingle All the Way, but I was really hoping for better luck. But every time I stopped by the store, all I found was an empty gap where bright neon colors were supposed to be. Would I ever see one of these things in real life?

Like most other viral fads over the past few years, there was a sign taped neatly above the gap limiting customers to a certain quantity per person. There’s a certain irony in placing a limit on something that never seems to be available in the first place.

I may not have gotten my hands on a squishy cube, but I did get to spend the weekend reading about a genuinely simple piece of economics hiding inside a very silly toy shortage.

Everyone suddenly wants a $5 blob of dough

NeeDoh is the official brand name of the squishy, dough-filled stress ball made by a Massachusetts company called Schylling. Yes, it’s that same toy you’ve seen mentioned in the news where children have been seriously burned after microwaving them. This toy may be incredibly popular right now, but it’s actually been around for almost a decade, and squishy toys in general have been around since the 1960s. The product hasn’t really changed over the past decade, but its popularity has taken off. People just suddenly can’t get enough of it.

There are few driving forces to explain what we’re seeing on the empty store shelves, which will inevitably happen again when the NeeDoh fad phases, and the next random object inexplicably takes over the internet.

TikTok turned squeezing foam into content. Every video that does well makes more people want the object, which leads to more videos, which makes even more people want it. That loop alone has turned a niche stress toy into a cultural moment. It helps that the target demographic is also unusually sensitive to peer influence, but what makes NeeDoh especially interesting is how far the demand spreads beyond that generation. Stressed-out adults are also keeping one on their desk, and that’s not exactly a small market either.

That combination is a textbook shift in demand. There are several factors that could affect the demand for a product, but not every surge comes from the same source. When college towns fill back up in the fall, Target sees a predictable spike in box fans, power strips, and everything else on those “dorm room essential” lists. When refund checks hit students’ bank accounts, it’s no surprise the TV aisle looks a little emptier than the week before. Those are demand shifts driven by population and income, but that doesn’t explain the surge for Squishies.

This is a fairly simple change in people’s tastes and preferences, thanks almost entirely to social media. In a smaller way, buyers’ expectations have likely shifted, too. Some shoppers are now racing to grab one at retail price before they’re stuck paying resale. If you’re curious, there are secondary markets where rare Squishmallows already go for hundreds of dollars above sticker.

Of course, this shift has shown up in the company’s sales numbers as well. Schylling says NeeDoh sales are running about six times higher than last year. That’s even after 2025 sales had already doubled 2024’s numbers! By mid-February of this year, the company had already sold through eight months of inventory it had planned to last much longer.

But that raises the obvious next question: if demand jumps and supply doesn’t budge, shouldn’t prices increase as economics would suggest? I was certainly wondering why NeeDohs were still listed at $5 when the shelves were all empty.

The shortage nobody’s fixing

Let’s pivot from a toy story to an economics story. When demand increases, and price doesn’t move to catch up, you get a textbook shortage: the quantity demanded is larger than the quantity supplied at the going price. Normally, prices increase to release the pressure on the market. As prices increase, buyers progressively opt out until the quantity demanded equals quantity supplied. The new equilibrium is one where shelves get restocked at a price everyone can live with. Instead, the company has opted for rationing as its method for allocating a scarce resource.

So why not just raise the price? There’s real money sitting on the table given how much demand is out there. CEO Paul Weingard has been fairly candid about not wanting it. He’s seen this genre of toy fizzle out before, most notably the fidget spinners going from everywhere to landfills in about a year. Part of what killed them was flooding the market and chasing every dollar of demand while it lasted. He also doesn’t want to be the guy who priced out the twelve-year-old with birthday money.

That leaves one other way to close a shortage without touching the price: make more of it. In economic terms, the company needs to shift the supply curve to the right instead.

I don’t normally hit you with a graph, let alone two in one article. Normally, an increase in supply would bring prices down from wherever they climbed after demand spiked. We’ll likely see that in the secondary market if Schylling ramps up production, but that’s not what will happen on toy store shelves since the sticker price never went up in the first place. This supply shift will instead do what the price increase would have: close the gap between what people want and what’s on the shelf.

Weingard has been open about protecting the brand, but he’s also said the company is genuinely trying to make more. It’s added a second shift at the distribution center, expanded its warehouse, and has people working nights and weekends to move product through the pipeline. What they can’t do is scale production the way a software company scales a server.

“We’re in constant production. But the reality is that there’s no magic wand. You can’t just say, ‘Hey, we want twice as much, or ten times as much’ and suddenly have factories produce more. Our products are injection-molded on the outside, so we are having to make new molds to be able to increase capacity. We’re moving as quickly as possible, but it’s still going to leave shelves empty for some time.”

NeeDoh toys are injection-molded, which means increasing capacity requires building new molds. That’s slow, expensive, physical work. By investing in new equipment, the company is introducing a supply shift. Capital investment like this shifts the whole supply curve rightward. Unfortunately for parents looking to get their hands on a replacement squishy for the one that burst in the microwave last week, it may take months to see results.

Final Thoughts

None of this is happening for the first time, either. If it sounds familiar to the adults reading over their kids’ shoulders, it should. Beanie Babies faced almost the same storyline back in the late 1990s. The company manufactured scarcity, a frenzied secondary market appeared, and people started buying bears on the bet they’d be worth more later. Then Ty flooded the market and killed the line outright, and the whole thing collapsed. Weingard’s caution about overproducing is likely built on the fact that he’s seen this movie end badly once already and would rather not star in the sequel.

Of course, it’s worth noting that we’re already seeing some pundits writing think pieces about how Gen Z can’t afford a house because of $5 squishies. It’ll likely become this generation’s avocado toast, and it’s just as unfair. No single small purchase explains a housing market, but it does at least acknowledge that we tend to underrate the cumulative cost of small, emotionally satisfying purchases, probably because each one feels too small to matter on its own.

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Unlike NeeDoh, this newsletter has no injection molds, no fixed capital, and no CEO nervously watching a demand curve. Forwarding it to a friend costs almost nothing and takes about four seconds. Feel free to help me increase the demand.

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• The packaging and slogan for NeeDohs were designed in just one day by Schylling’s product development team [The Toy Coach]

• The global stress-toy market is expected to grow to $7.95 billion in 2030 from $5.88 billion in 2025, partly because of the rising incidence of stress and anxiety among adults [The Business Research Company]

• For Americans who engage in self-care activities every day, the top reasons cited are for improving physical health (53%), managing stress (52%), and enhancing mental and emotional well-being (50%) [YouGov]

• Jack the Black Cat, of which only 500 were originally produced, is the most valuable regularly traded rare Squishmallow, now commanding $1,800 to $2,500 on the secondary market [Toynk]

• Launched in 1993, the original line of Beanie Babies became so popular that its parent company amassed a reported $6 billion fortune [ABC News]

Hi y’all! Here are five stories from this week that contained some neat applications of economic principles or are related to teaching:

1. NASCAR execs are keeping a close eye on the price of gas, but not because of the cars on track [Sportico]

2. Recruiters say parents are increasingly applying for jobs on behalf of their adult children [Kanebridge News | The Wall Street Journal]

3. Americans got their biggest raises in 40 years, but inflation took most of it [CBS News]

4. Credit card debt rises to $1.26 trillion, nearing an all time record [ABC News]

5. Fast casual salad chain Sweetgreen saw its stock drop 29% over the past month despite not having direct ties to the contaminated greens [Yahoo! Finance]

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A viral tweet complaining about the price of burritos has set off a political food fight, but none of the pundits weighing in actually explained where the price comes from. This week’s article breaks down the economics behind the outrage by looking at inflation-adjusted prices, minutes of labor, and the delivery-app markup hiding in plain sight. The numbers don’t say what you’d expect:

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What started as a common gripe about the cost of eating out for lunch turned part of the internet upside down. A spokesperson for Turning Point USA shared the complaint on his social media account, igniting an online debate about affordability. The original post has already been viewed more than 3 million times over the past two weeks.

Could this be Gen Z’s version of the millennial avocado toast debate? One political commentator told the unnamed student to eat at the dining hall with the meal plan he’d presumably already paid for. Another argued it’s just a sign of a generation that doesn’t know how to cook. A third chimed in with imperative advice to get a job and eat ramen instead.

Of course, none of them took the time to see if prices have really changed by that much or why the student may be seeing such a high price. All of them sidestepped the underlying point about affordability, which has been a persistent concern for Americans for several years now.

Let’s skip the fighting and look at the data together. Yes, burrito prices are up. But are they really that much more expensive than they were a few years ago? It turns out the answer depends entirely on how you measure “more expensive.”

How Do We Get to a $20 Burrito, Anyway?

Before we figure out how much burrito prices have changed, it’s worth debunking the number everyone’s actually mad about. Few burritos actually cost $20 unless you’re eating at a proper sit-down restaurant, loading up on premium toppings, or having it delivered. Paying for labor-intensive services will always cost more than cooking at home.

So where does the $20 figure actually come from? A walk-in burrito doesn’t get you there, but a delivered one can get you close.

I pulled up the Chipotle app and priced out a steak burrito from my nearest location. I chose steak on purpose since it’s the most expensive protein on the menu. I legitimately wanted to see if it would cost $20, but the after-tax total came to about $12.

I’d have to drive to get that burrito, but I could also order through a delivery app, Grubhub or DoorDash. That’s not uncommon, as it turns out that nearly 2 in 5 Gen Z and Millennials order from delivery apps at least once a week. I suspected this is where the $20 burrito can be found.

So what was the damage? Both apps landed around $23 before tipping the driver. DoorDash came in slightly cheaper, but only because it was running a no-delivery-fee promotion when I was pulling data. Tack that fee back on, and the two are effectively the same. Realistically, the final totals would run a few dollars higher because I don’t want to find out what happens to my food (assuming it shows up at all) if I skip out on the tip.

The delivery layer is how we can find our mysterious $20 burrito. For starters, restaurants raise delivery-app menu prices to offset platform commissions. You can already confirm this markup by looking at the actual item in question. Chipotle lists the steak burrito at $10.75 in-store versus $14 on the delivery apps.

And then there are the added fees. In casual conversations with my own students, most assume ordering through these apps adds only a few dollars in fees. They’re typically unaware that restaurants have already baked a markup into the delivery-menu price and then the platform tacks on two or three separate fees. It looks like our $20 burrito comes from a delivery platform charging $10 for a burrito and $10 for the privilege of not going to get it yourself.

I do have one caveat before we move to actual price history. This comparison only covers the burrito itself, without premium add-ons or sides. I went back and added guac and queso, but my total only came out to $15 if I picked it up in-store. I would need to add chips and a drink to get all the way $20, but then we’re talking about a full meal and not just a burrito.

Now that we know what’s actually driving the $20 figure, let’s look at whether the base price of the burrito itself has really changed all that much.

What Actually Happened to Burrito Prices

A Chipotle burrito runs about $10 in the store today. The underlying question is how much that’s actually changed over the past few years. Thankfully, there’s no shortage of old Chipotle menu photos floating around. Since a lot of the current angst traces back to the inflation spike of the past few years, I went looking for a menu board from 2022. Back then, a chicken burrito ran about $7.35:

Is that increase actually meaningful, or is it just what happens to every price in an economy with any inflation at all?

Every price has two versions: the nominal price, which is just the number on the receipt, and the real price, which adjusts that number for inflation. That $7.35 chicken burrito is the nominal 2022 price. Prices have gone up since then, but nominal prices almost always go up. That’s what a growing economy with any inflation looks like.

I’ll admit that adjusting for inflation can feel like we’re dodging the issue. It can feel like we’re conceding everything got more expensive and calling it math. That’s not quite what’s happening. Inflation isn’t one price rising in isolation, but rather it’s the value of a dollar shrinking across the board. Gas, rent, movie tickets, and burritos are all moving at roughly the same time, for related reasons. Looking at inflation-adjusted values lets us ask whether burritos got more expensive faster than everything else did.

This distinction really matters because it’s the same logic behind cost-of-living raises and calls for increasing the minimum wage. As prices go up, wages are supposed to go up as well. If they don’t, real income falls even while the paycheck number gets bigger. We’ll get to wages directly in the next section, but let’s just isolate the burrito from the rest of inflation.

One economist has done exactly that, tracking down old menu prices and adjusting them into today’s dollars. Once you do, the real price of a chicken burrito (in 2026 dollars) has been remarkably stable. It’s up less than 50 cents over the past four years.

Adjusting for inflation shows the burrito hasn’t really outpaced the rest of the economy, but inflation-adjusted dollars can feel abstract. Thankfully, there’s a more intuitive way to feel the same finding.

Using Time to Measure Inflation

It can be hard to get an intuitive sense of what a “2026 dollar” actually is. Fortunately, there’s another way to look at price changes that some people find more concrete: how long does the average worker have to work to afford the thing? This is called the “time price” of a good.

A Chipotle chicken burrito ran about $6.25 back in 2010, and average hourly earnings for a private-sector, nonsupervisory worker were about $19. That works out to roughly 20 minutes of work. Today, a Chipotle burrito costs $9.92 nationally, while the average hourly wage for that same group is $32.40. That’s about 18 minutes.

Nominal prices have gone up, but our wages have gone up faster. It now takes the average worker less time to earn a burrito than it did sixteen years ago. The student was right that the number on the receipt is bigger, but the number that measures affordability hasn’t actually gotten worse for the typical worker.

Who Is the Burrito Actually Expensive For?

That 18–20 minute finding is only true for the average worker. It’s worth complicating a bit further, in the interest of transparency. You might reasonably wonder whether the number is skewed upward by high earners, and whether the median would tell a different story. Those two measures are surprisingly similar, so that adjustment wouldn’t make much of a difference.

A better complaint about the calculation probably lives on the other end of the income distribution. A college student is unlikely to be earning the average or median wage while in school. What if they’re working a minimum-wage job to pay for their meals?

The federal minimum wage has been $7.25 an hour since 2009. In 2010, a minimum-wage worker would have spent about 52 minutes earning that $6.25 burrito. The same worker earning the federal minimum wage sixteen years later needs about 81 minutes for a $9.79 burrito. That’s more than 50% more time for the same meal.

Of course, the share of workers actually earning at or below the federal minimum has fallen substantially over that period, partly because state minimum wages have climbed while the federal floor stayed frozen. Fewer people are technically affected by that $7.25 number, but the ones who are have watched their burrito get meaningfully less affordable.

So is a burrito expensive? It depends entirely on what you earn, which is often a function of where you live. For the average worker, the burrito is exactly as affordable as it was in 2010. For a minimum-wage worker, it’s meaningfully less affordable. And for either worker, getting it delivered makes the numbers worse across the board.

Final Thoughts

None of this was ever really about burritos, or really about $20. It’s the same reason grocery prices keep coming up in conversations that have nothing to do with which groceries people are putting in their cart. Food is one of the only prices people see updated in real time, every week, with their own eyes.

So let’s be clear about what the data does and doesn’t say. If people are paying $20 for a burrito, they’re probably paying for convenience. Yes, a burrito assembled at home costs a fraction of the delivered price, but the original complaint was an admission that someone felt squeezed by higher prices. Dismissing that feeling doesn’t address the root problem. People who are genuinely struggling with affordability don’t feel heard by being told to toughen up. If anything, it probably confirms their suspicion that nobody in charge is listening.

The most honest complication of all this is that if you’ve read this far and none of it matches your own experience, you might be exactly right. The “average worker” is a statistical construct, not an actual person. If your wages have outpaced inflation, you may not understand what all the fuss is about. But for every worker whose earnings have outpaced prices, there’s someone else watching prices rise faster than their paycheck. The data above describes the average, not either one of them specifically.

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If you’ve made it this far, do me a favor: go price out a burrito and reply with the numbers. While you’re at it, share this with anyone you see complaining about the price of fast food. It may not change their opinions about the prices, but it will let them know they aren’t alone.

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• “Food away from home” has increased 24.2% since the start of 2022 [U.S. Bureau of Labor Statistics via FRED]

• There are 4,064 Chipotle restaurants in the United States as of June 16, 2026 [ScrapeHero]

• The median usual weekly nominal earnings for workers age 20 to 24 who are employed full time is $831 per week [U.S. Bureau of Labor Statistics]

• With the passage of the Fair Labor Standards Act of 1938 (FLSA), the U.S. minimum wage was initially set at $0.25 per hour for covered workers [Department of Labor]

• Five Southern states (Louisiana, Mississippi, Alabama, Tennessee, and South Carolina) have no minimum wage laws, but three states (Georgia, Oklahoma, and Wyoming) have state minimum wage rates that are lower than the federal rate [UC Davis Center for Poverty and Inequality Research]