The Price of Beer, Inflation, and Expectations
I was recently reflecting on the price of beer after signing my name to what felt like a pricey tab. A standard pint is seven bucks in Portland, and it feels like just a few years ago it was six. A few years before that, five. My experience is pretty universal, I think. We had a spike in inflation that reset the prices for everything after Covid, and now we suffer sticker shock every time we come up against it.
But are prices really that high? Inflation was basically stable for decades. Prices went up predictably, and not very fast. Adjusted for inflation to 2019 prices, the cost of a six-pack of beer was $6.57 in 1984. It actually fell for the next thirty years (in adjusted dollars) before ticking back up to $6.50 in 2019, the last year inflation wasn’t wonky. If you go back fifty years, beer gets pricey—$7.53 a six pack, but you have to be 71 (or, depending on the state, 68) to remember that.
It’s here where things get a little weird, and where the whole inflation thing can begin to bend minds. If you adjust past prices to 2024 inflation instead of 2019, they all jump up, ranging between $7.33 and $7.87 (2019). A sixer today costs $7.88. In other words, beer is either priced about exactly where you’d expect it to be based on the cost of other stuff, or it’s really expensive. Almost universally, it feels really expensive.
(Numbers aren’t that easy to come by, and they don’t all measure the same thing. The figures I used came from this Stacker article, which seems to have a solid methodology and also capture what seems like a decent average across all beer—and they pass the smell test for someone who lived through much of that time. If you look at a different dataset, the numbers may differ.)
Money is always relative—if you look at it too closely, it becomes positively insubstantial. The price of a currency relative to another always fries my brain. One year I go to Europe and a beer is, say, ten of my dollars, and I go back and it’s seven. We imagine a dollar represents something solid, like the actual price of a good, when in fact it has a lot to do with currency strength and stability. During hyperinflation, people bring wheelbarrows of cash into stores to buy a loaf of bread. The bread’s intrinsic value hasn’t changed, the amount of the currency needed to purchase it has.
That illusion has been enhanced by the incredible stability of inflation. Stuff has seemed to be worth about what we expect for so long it has made us believe prices and value were identical. When we see a $12 sixer or a $7 pint, our minds tell us it’s expensive because, thanks to inflation, it deviates from our expectations of what a beer should cost.
The price of a six-pack went up about a buck every decade in actual pricing. What was the price of beer in 1994? The nominal price was a fixed and real $3.65. But if you look backwards from 2019, it was $6.32; from 2024 it was $7.65.
All of which brings us back to me and my bar tab. Is beer more expensive now? It depends.
Cover Photo: Midjourney-generated illustration (prompt: waiter in a tuxedo holding a tray with a single glass of beer in a champagne flute)