Data & Research December 3, 2008

No Deflation in Cost of True Love

Recession or not, true love will cost you dearly this year.
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More accurately, the cost of the items given by “my true love’ in the song, ‘The Twelve Days of Christmas’, has gone up 8.1% over the past year to $21,080, at least according to the PNC Christmas Price Index.
That’s the second biggest “leap’ in the 24-year history of the whimsical economic analysis by PNC Wealth Management (the largest jump was 16.0% in 2003). This year, commodities prices, concerns about increased energy and shipping costs and jobs were major factors in the cost, according to PNC.
Nearly all of the increase was due to the Seven Swans-a-Swimming, which cost 33.3% more than a year ago (see Gold Boosts Cost of ‘True Love’). Indeed, “True Loves’ will spend $5,600 this year for Swans compared with $4,200 in 2007, $1,400 of the $1,573 increase. In fact, if you exclude the costs of swans, the so-called “core’ CPI increased just 1.1%.
Nor were the swans the only item to have a “fowl’ impact on the pricing. The Two Turtle Doves were up 37.5% (to $56 from $40), and that Partridge in the Pear Tree was a third higher ($199.99 versus $149.99 a year ago). On the other hand, the Three French Hens and Six Geese-a-Laying both dropped in price. This year the hens cost $30.00 (a drop of 33.3%), and the geese cost $240.00, also falling one-third. The Four Calling Birds remained steady, but, at $599.96, were pricey nonetheless.
On the other hand, True Loves will pay less for the Five Gold Rings this year, with prices dropping by 11.4%, according to PNC.
Labor Costs
Higher labor costs squeezed the price of the eight Maids-a-Milking, who received a raise for the second straight year, due to another increase in the federal minimum wage (to $6.55 per hour). In the last two years, the Maids-a-Milking have seen their wages rise by $1.40 per hour, an increase of 27%. Still, the maids will cost the True Love $52.40 this year, only $5.60 more than a year ago, a relative bargain in the PNC CPI. The cost of most performers in the index — the Drummers Drumming, Pipers Piping and Lords-a-Leaping — jumped a more modest 3%, essentially a cost-of-living increase. Only the price for the Ladies Dancing was unchanged this year.
For those True Loves who prefer the convenience of shopping online, PNC Wealth Management also calculates the cost of “The Twelve Days of Christmas’ gifts purchased on the Web. This year, the trends identified in the traditional index are repeated in the Internet version, but with an overall price growth of just 2.8%, significantly less than the traditional PNC CPI increase of 8.1%. On the other hand, True Loves will pay a grand total of $31,957 to buy the items online, almost $11,000 more than in the traditional index. PNC notes that the Internet price of Swans-a-Swimming was unchanged this year, but that they still cost significantly more to buy online at $7,035. In general, Internet prices are higher than their non-Internet counterparts because of shipping costs for birds and the convenience factor of shopping online, according to PNC.
As part of its annual tradition, PNC Wealth Management also tabulates the ‘True Cost of Christmas,’ which is the total cost of items gifted by a True Love who repeats all of the song’s verses. This holiday season, very generous True Loves will pay more than ever before; $86,609 for all 364 items, up from $78,100 in 2007, a 10.9% increase.
The cheapest cost of Christmas in dollars occurred in 1995, when the true cost of Christmas was only $51,000.
(1) Editor’s Note: If you’re wondering where one finds the price of some of this stuff, PNC says that the National Aviary in Pittsburgh provided the cost of some of the birds in the song, including the partridge, the French hens, geese and swans. The Cincinnati Zoo provided the cost of turtle-doves, while national pet chain PetCo provides the price of the calling birds, or canaries.
The pear tree price came from Waterloo Gardens, a Philadelphia nursery. Gordon’s Jewelers provided the cost of five 14-carat gold rings, and Philadanco, a modern dance company in Philadelphia, offered the price of ladies dancing. The Pennsylvania Ballet offered the price of the lords a-leaping. Prices for the musicians in the song—the drummers and pipers—were provided by a Pennsylvania musicians union.

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