Have you noticed that having fun has almost become to expensive? If so, there’s an economic term to describe the phenomenon, it’s called “Funflation.”
SAN DIEGO — If having fun feels as though it’s becoming too expensive, there’s an economic term to describe the phenomenon: “Funflation.”
Funflation is a trend where the cost of entertainment and leisure activities skyrocket. Yet, customers stubbornly continue to splurge on experiences, such as the San Diego County Fair, Padres tickets or concerts.
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“Funflation is a situation where the price of doing fun things, like going to events, has gone up tremendously. I think the price, for example, of going out to a concert has increased by about 40% over the last few years,” Alan Gin, a Professor of Economics at the University of San Diego, said.
Driven by pent-up demand from the pandemic and dynamic pricing, he told CBS 8 that people are finding themselves paying significantly more for concerts, sporting events and vacations.
“And then, unfortunately, there’s an attitude among some people, and it might be justified; they feel they can’t do things that other people have done previously, such as buy a house. That maybe affording a house is out of their reach now, and so, instead of saving up to do something like that, they’re living in the moment,” Gin said.
Gin told CBS 8 that the rising cost of food, products, gas and more all play a role in the price of experiences going up.
“I think the only thing that’s going to hold these prices down is if people get priced out, unfortunately,” Gin said. If these people who put on these events find that people are not going because the price is high, eventually then, prices may come down. But for now, we’re not seeing any signs as far as that’s concerned.”
Gin added that he believes artificial intelligence also plays a major role behind “dynamic pricing,” as AI analyzes market data and adjusts prices automatically in real-time to match the supply, demand and competitor pricing.