The Real Price of Being Home Alone
How much would the McAllister’s pizza order and groceries cost today?
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Tonight would make a great night to cuddle up on your couch, perhaps with a steaming cup of hot chocolate. Picture yourself logged into Disney+, ready to revisit the timeless tale of an 8-year-old who finds himself inadvertently unchaperoned in his Mojo Dojo Casa House facing two bumbling burglars while the rest of his family jets off to Paris.
The 1990 holiday classic “Home Alone” is more than mere slapstick and booby traps, it’s a film about, well, the economy. Now grown up, once childhood viewers begin questioning the size of the mortgage, the bill for the large family international flight, and just how much Kevin’s grocery store visit of $19.89 would cost today accounting for inflation. Let’s explore thirty years of price changes while listening to John William’s Oscar-nominated score in the background.
Before we dive into those iconic scenes, we need to make sure we understand the fundamentals of inflation. The Bureau of Labor Statistics (BLS) is the U.S. agency tasked with calculating the rate at which prices change by calculating a measure known as the Consumer Price Index (CPI). The rate at which the CPI changes is what’s referred to as "inflation.” You can think of this as a snapshot of the average change in prices that we faced over the past year.
Like any metric, it has its quirks. We'll uncover why it might not always paint a complete picture, but it’s important to understand how the measures are calculated because those values affect everything from government assistance to tax brackets.
For nearly a century, the BLS has tracked the prices of over 80,000 consumer goods and services. They employ thousands of agents across the country to manually input items, noting their exact quality, components, and measurements. Accurate inflation data is an enormous undertaking, and we are lucky to have such precise and detailed information freely available.
For now, we’ll look at two different instances in the film to better understand the work that the BLS does in capturing price changes over time. Using these scenes, we can also better think about how the value of a dollar has changed over the past 30 years. By the time we’re done, you’ll have a better understanding of inflation and will be more careful when comparing prices from decades ago with prices today.
The McCallister's Order Pizzas
Let’s start with an easy example from the movie—pizza delivery. In the opening scene, Kevin's family orders 10 large pizzas from Little Nero's Pizza for $122.50 (plus tip). That value is known as the nominal price, but we want to know what that amount would feel like in today's dollars. When economists make these conversions, they’re trying to estimate the real value, or what that old price would feel like today. Thankfully, the BLS has an inflation calculator to help us with the conversion:
While the movie takes place in December 1990, those $122.50 have morphed into $281.12 in today’s dollars. But here's the twist: while the average dollar value may have inflated, the price of pizza hasn’t grown quite as much. Inflation measures the change in the CPI, and the CPI considers a bundle of goods that an average household purchases. Just because we’ve seen prices increase overall doesn’t mean that every individual price increased by the same amount.
Little Nero's Pizza, which delivers the order, is a fictional spin on the real-world Little Caesars Pizza. So, how much do 10 classic cheese and pepperoni pizzas from the genuine Little Caesars near the McCallister house compare? It comes to only $91.98 (plus tip). The nominal price actually shrunk!
How is this possible when we’ve seen prices for everything rise by 129% over the past 33 years? Remember, inflation rates represent the average change in prices across a basket of goods. While some prices in that basket might skyrocket, others, like our beloved large cheese pizzas, have decreased.
In the case of Little Ceasars, improvements in technology such as the rotary air impingement oven in the late 1990s and the simplification of their “Hot-N-Ready” menu helped reduce costs that consumers enjoy today. Of course, another contributing factor may be a change to cheaper lower quality ingredients. Let us know in the comments if anyone old enough remembers Little Caesars taste pre-Hot-N-Ready.
Kevin Goes Grocery Shopping
Now that we’ve got a handle on an easy example, it’s time to level up to something more akin to what the BLS is tasked with doing for thousands of products. Kevin decides to go on a solo grocery shopping expedition. After making his choices, he heads to the checkout with a cart filled with items totaling $19.83 thanks to a $1 off coupon. Now, the burning question is, what would that same shopping visit cost in today's terms? Some estimates have soared as high as $73, leaving us perplexed.
You see, comparing prices over time isn't as simple as it may seem. While large cheese pizzas might remain relatively consistent, many products have evolved in size and quality over the years. This is the opposite of what we call "shrinkflation," where products become smaller but maintain their price. Many of the products Kevin bought on his trip aren’t even available in stores anymore because producers offer larger quantities. This is part of the hard work that the economists at the BLS do to make sure that the CPI value can be consistently compared across decades.
As products and services improve or change in size, direct price comparisons without accounting for these adjustments can lead to misleading conclusions. So, after carefully ensuring that we're comparing apples to apples (or groceries to groceries, in this case), we find that Kevin's grocery bill would amount to approximately $43.78 in 2023 dollars. Yes, that's more than double the original total, but there’s something we need to keep in mind: wages have also grown significantly. More on that in a bit. First? Let’s talk grocery conversion.
Kevin's shopping cart includes a half-gallon of milk, a 4-pack of Quilted Northern toilet paper, Wonder Bread, liquid Tide detergent, a half-gallon of Tropicana orange juice, 20 Snuggle dryer sheets, 100 square feet of plastic wrap, two TV dinners (Turkey and Mac & Cheese), and a small pack of army men (for the kids, of course). (Side note: the groceries in Kevin’s famous grocery bag ripping scene now include two packages of toilet paper but no heavy liquid detergent.) For grocery price data, we looked at prices online for a popular regional chain (Meijer) in the Chicago area. For the toy army men, we grabbed the price from Walmart.com.
Many of these items, like half-gallons of milk, remain nearly the same size as they were in 1990. However, for others, we've had to adjust the quantities sold in stores today to match their 1990 counterparts. Take, for instance, Kevin's 4-pack of toilet paper. The same brand now typically comes in a 6-roll package as their smallest size. To price to an equivalent product, we multiply the current price by 4/6, which gives us a price of approximately $4.66 for a 4-pack of Quilted Northern.
We apply similar logic to the Snuggle dryer sheets and plastic wrap. Since Kevin purchased items half the size of today's products, we simply divide the current price by two to find the price for an equivalent size. The Tide laundry detergent posed a unique challenge. Thankfully, one of us (Chris) has cracked the code on how to make the conversion for all the items in one of his more recent TikTok videos, but the painstaking details are below.
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Tide currently sells bottles that are either 92 or 37 fluid ounces oz, but which one did Kevin purchase in the scene? The current product dimensions note that the base for the 37 oz is 6"x3" and is 9" tall. For comparison, the half-gallon of milk is also 3" wide and around 9" tall. The bases of these two items match in this first screenshot.
The problem? Kevin's Detergent is taller than the milk carton, so it’s taller than 9”. The 92 oz detergent is also 12” tall, however, the base is way too big at 8” instead of the 3”. To make sure we’re applying the right conversion, we need to know what detergent size was common 33 years ago. The best we could find is a picture of a bottle from 1986 showing 64 fl oz. Therefore, our calculations modify the 92z oz product offered today to be (64/92 or) 2/3rds the quantity of liquid detergent so that it better matches Kevin’s purchase in 1990.
Before we wrap up this grocery adventure, let's not forget about taxes. It’s not mentioned in the scene, but Kevin likely pays taxes on his groceries and army men. Illinois is 1 of 13 states that impose taxes on groceries, so we have included the state’s 1% grocery tax on most items. For the rest, we applied Chicago’s current sales tax, which hovers around 10%.
And now, we finally present an accurate estimate of how much Kevin would have spent in 2023 if he had gone shopping for the exact same items from his local Meijer store:
Our final receipt from Meijer reveals something intriguing. A careful look at Kevin's equivalent shopping cart shows prices have increased 121% since 1990! Thanks to BLS, we can look at official measures of food prices from the period. Since 1990, grocery prices have grown 114%. That's quite a jump, but here's the catch: this change is still much slower than the average price change (129%) since that period and, far more importantly, is also much slower than wage growth. In fact, median wages have surged by a remarkable 174% over the past three decades!
As we wrap up our journey to understanding inflation through the lens of "Home Alone," we hope you’re left with more than just a newfound appreciation for pizza, grocery prices, and the hard work it takes for the BLS to get accurate measures. This movie, seemingly a lighthearted holiday classic, offers a profound perspective on inflation that spans decades.
In the last thirty years, families across the country have faced their fair share of challenges. And let's face it, since the pandemic, not everyone's wages managed to keep pace with inflation. It's a stark reminder that while most are experiencing wage growth; what is true for the median person, may not be true for you.
But here's where our exploration goes beyond mere inflation at the median. Surprisingly, recent research reveals a glimmer of hope. Historically low unemployment rates have ushered in improved labor conditions, especially for lower-income workers. This, in turn, has propelled wage growth to outpace inflation for the lower 50% of the income distribution since 2019.
Accurate, careful, and precise measurements are necessary to describe our complex economy. Only the truth can help us improve our lives. Since 1990, our most basic necessity, food, has dramatically become more affordable since Kevin McAlister forged adult domesticity on his own.
McCauley Culkin was paid $110,000 (about $253,000 today) for his role as Kevin McCallister, but doesn't earn any royalties from Home Alone [Parade]
There are 4,203 Little Caesars locations in the United States as of November 10, 2023 [ScrapeHero]
The two burglars, Marv and Harry, chose that particular neighborhood because of “The Silver Tuna” McCallister home. It sold for $875,000 in 1989. For reference, the median home price was only $125,000 in 1990 [@JeremyHorpedahl]
Airline tickets have risen 87% since 1990, far slower than median wages. Ticket prices are down 21% from their peak in 2013. [BLS via FRED]