Tuesday, November 25, 2008

Anecdotes Are Not Data, But...

Back in May when fuel prices were rising and every firm and their competitors were adding "surcharges" to products to offset transportation costs, I wondered how long it would take for falling fuel prices to result in a removal of those surcharges.

This story from yesterday's edition of the local newspaper, The Richmond Times-Dispatch seems to indicate it is happening, at least in this area. Anyone else have stories to share that have otherwise been missed? This makes great discussion about how markets work, but especially about the idea of "downwardly sticky." This is usually applied to wages. (We're less willing to accept pay cuts than raises - go figure.) But it is frequently applied to prices, although in more competitive markets I'm not sure the effect is as pronounced.

What are your thoughts? Does anyone have stories to share?

I no sooner get this posted and get a chance to open today's newspaper and look at what I find in The Wall Street Journal. It's an interesting article on what it costs airlines to fly your luggage. Maybe hoping that some surcharges would be disappearing was too much expect. As it says at the top of the post, anecdotes are not data.

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