Monday 16 April 2012

The Price of Haircuts

Statistics New Zealand continues to prove itself the most fun stats agency in the world. Here's their infographic on the price of haircuts and the difficulties of quality-adjustment. And, here's their more detailed analysis.
Not so cut & dried : infographic
I happily attend a barber (formerly of Manchester Street, now of Ferry Road) who gives me something close to the 1951 haircut for about $20. I am forbidden from attending any barber who would give me the 1981 haircut.

We'd also expect that non-traded, labour intensive goods like haircutting would outstrip the overall inflation index; productivity increases in haircutting have been smaller than those in other sectors, and the sector does have to compete for labour.

22 comments:

  1. "We'd also expect that non-traded, labour intensive goods like haircutting would outstrip the overall inflation index; productivity increases in haircutting have been smaller than those in other sectors, and the sector does have to compete for labour."

    Old Baumol cost disease. I'd note that the sharp increase in our terms of trade should have helped push this on a bit further ;)

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  2. How do 2 and 3 shillings equate to 6 and 8 dollars??

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    1. That's with inflation adjustment. I'll trust StatsNZ there; I've always found Livres/Sous/Derniers impenetrable. Or at least I have no clue what a shilling is worth in decimal currency.

      Favourite bit in Alice in Wonderland: the jurors in the trial of the Knave of Hearts write down a couple of irrelevant dates, add them together, then reduce them to Pounds, Shillings and Pence....

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    2. A shilling under the old currency was made up of 12 pence, so a sixpence was a half shilling. At the time of decimalisation a shilling was worth roughly 10 cents, and a sixpence 5 cents. I still remember as a young lad being able to use the old shillings and sixpences as legal tender in the 70's.

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  3. Great graphic, what's interesting to me is how the price of female to male haircuts has risen over time, perhaps in step with the female to male earnings ratio?

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    1. Nice point. Female labour market participation in 1951 NZ would have been fairly low.

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    2. Actually, in 1951 it was 2:3, which expanded out to 1:3.25 by 1981. What's interesting is that that gap has closed down to 3:5 since then, which is only a bit more than in 1951. Does this reflect the rise of the metrosexual?

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    3. @NZClassicalLiberal: I wonder whether it's the more recent bundling of men's haircuts with head massages at the fancy places.

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    4. Surely having one's head massaged is a fundamentally metrosexual passtime. Though, now you mention it, I wonder how much of the difference in the average price between men's and women's haircuts could be explained by the difference in how likely men are to request a head massage relative to women.

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  4. Good point. It must be to do with rounding, ie the actual cost in 1951 was 2 shillings something, which rounded up to three shillings, then adjusted for inflation came to seven dollars something, which rounded up to eight dollars.

    Failing that, it'll be bureaucratic incompetence.

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    1. I'd bet against bureaucratic incompetence with StatsNZ.

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    2. I'm never willing to bet (much) against bureaucratic incompetence, but rounding does seem the more likely explanation.

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    3. nzclassicalliberal, yes I was referring to the inconsistent ratio 2:3 versus 6:8 and your answer makes sense to me.

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    4. It is to do with rounding. We adjusted the 1951 prices precisely to figures in dollars and cents, then rounded the figures to the nearest dollar for presentation purposes.

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  5. How do Stats come up with $38 for a man's haircut? The men's hairdressers in Lower Hutt all charge less than $20, the one I go to, run by women, has a standard fee of $12.50.

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    1. The figure of $38 is the mean price of a man's wet cut. We also survey a man's dry cut - the mean price of these is $24 and nearly half of the surveyed prices are $20 or cheaper.

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  6. I wonder: has quality increased over time? Very hard to measure, of course, but as people get richer, they would tend to be more willing to pay for higher quality haircuts.

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    1. People can still choose the old-time barber experience at relatively low prices; I do. But I wonder how they handle that the men's "wet" haircut is often really a bundling of a haircut with a head massage from an attractive young shampoo girl, the experience of which may be worth something even if no haircut followed.

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  7. I always wonder why anyone would cut female hair, mens hair must be infinitly more profitable. At $20 for 10-15mins thats $80-$120/hr compared to a womans time consuming (1hr-2hr) job, and that is ex. the cost of relationship building required between hairdresser and female client!

    Anyway aren't we supposed to have machines where you stick your head in and lasers cut your hair perfectly everytime by now?

    Re: Head (scalp) massages, I see another honours project coming on.

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    1. Re female haircuts - they make their margins through upselling, judging by the $60-odd bottles of shampoo that my wife seems to come back with every time.

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  8. Sorry, you don't know me but I stumbled across this page while looking for a cheap haircut in Auckland. Why are men's haircuts so stupidly expensive in NZ? I just got back from 5 years in London and when I left I remember people telling me that everything would be more expensive over there. Well, you know what? Men's haircuts are often half the price in London than they are anywhere in NZ! And I only want the short-back-and-sides, should only take about 10-15 minutes!

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  9. There are, at least in Christchurch, a few $10-$15 haircut places for men. Is that out of line with lower-cost London places?

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