Sunday, April 20, 2014

The Price of Eggs (Volatility, Integration, and Tuition)

Yglesias at Vox posts on the recent price of eggs.

What's interesting is the volatility; over the course of a year (2008) it looks as if the price increased about a dollar, or maybe by 80 percent.  Now I can remember the price of eggs bouncing around in my youth.  IIRC they maybe went from 30 cents to 70 cents and back down (and up and down and up and down).  This was at the end of the era of small flocks, right as the industry started to be vertically integrated, with companies contracting with farmers.  I had always thought the purpose was to gain market power, by reducing the egg suppliers to a handful of companies they could collaborate to adjust supply and thereby keep prices relatively steady.  Now the graph only covers the last 10 years and shows a steady rise in prices but not much volatility except for the one year, so I'm not sure whether my understanding of the economics is wrong, or whether 2008 was an outlier. 

A side note: if the change in the price of eggs from 1954 to 2014 had tracked the price of tuition and fees at the college I attended, the price would be close to $100 now.

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