Greg Linton ‘24, Jacob Deck ‘24 and Enzi Dabner ‘24
When asked to describe his impression of prices over the course of his time at Trinity since entering as a freshman in the fall of 2020, Dillon McDermott ’24 is not thrilled: “When I think about freshman year and getting groceries from, say, Target, Walmart or Whole Foods, the prices have absolutely skyrocketed since then.” McDermott, a Public Policy & Law major, feels the pressures of rising costs on his wallet. “It’s really unfortunate, because I feel like the amount of money I’ve made over the summers hasn’t really changed. The amount of money that is being taken out of my pocket due to inflation has really gone up.”
McDermott is not alone: It’s not cheap to be a student at Trinity. Between groceries, ordering food, gas, Greek Life dues and everything from personal hygiene products to alcohol, many Trinity students, regardless of budget size or composition, tend to enter the summer with a bank account that is surely no larger than it was at the start of the academic year.
The inflationary environment that Americans have dealt with since the pandemic has been no help. The Consumer Price Index for All Urban Consumers, a standard inflation metric used by economists to gauge inflation, has indicated a 6.07% annualized inflation rate for the average American between June 2020 and October 2023, which is well above the Federal Reserve’s target inflation rate of approximately 2%. The Consumer Price Index is measured using a basket of thousands of goods and services categorized broadly into areas like food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services. These categories are further broken down into more specific items.
The problem with the 6.07% figure is that while it attempts to capture the inflation experienced by the average American, everyone ultimately still experiences inflation differently. The basket of goods for an older individual living in Idaho will be different from that of a millennial living in New York. The average married man in his late 40s will have a different basket of goods and services than a young woman who is a college student. The comparisons could go on forever.
In Professor Hasan Cömert’s Central Banking and Inflation Seminar, students have spent the semester studying the mechanics behind the current inflation. In the process, several of us became intrigued with a particular question: how does the inflation experienced by Trinity College students compare to that of the CPI number put out by the Bureau of Labor Statistics?
To find out, we crafted a basket of goods and services to represent the average Trinity College student, consisting of carefully determined weights of categories such as dining, alcohol, Greek Life dues, gasoline prices and personal care products. We found prices for two points in time: 2020 and current, using price data that is local to the area surrounding Trinity. For example, in putting together the index for restaurants, we used the prices of menu items from spots that are popular among Trinity students, such as Bartaco, Birdcode Hot Chicken and Papa John’s.
We found that the average Trinity College student has experienced an inflation rate of 9.33% from 2020 to present, which is significantly higher than the 6.07% annualized CPI figure for the same time period. The categories that drive the rate higher in particular are dining out & ordering, gasoline prices and Greek Life dues.
Ultimately, as we begin to see the impact of the Federal Reserve’s efforts to grapple inflation, it will be interesting to take note of the relative disinflation trends for Trinity College students.