{"id":781332,"date":"2026-07-24T06:45:09","date_gmt":"2026-07-24T06:45:09","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/781332\/"},"modified":"2026-07-24T06:45:09","modified_gmt":"2026-07-24T06:45:09","slug":"not-just-cigarettes-and-alcohol-why-the-oasis-index-and-others-like-it-offer-real-economic-insights","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/781332\/","title":{"rendered":"Not just cigarettes and alcohol: why the \u2018Oasis index\u2019 and others like it offer real economic insights"},"content":{"rendered":"

Many Melburnians were aghast<\/a> to learn their city had won a trophy no one wants: the most expensive night out in the world. At least, that\u2019s according to the \u201cOasis index<\/a>\u201d, an annual metric from the research team at Deutsche Bank.<\/p>\n

The index tracks the cost of five beers and two packets of cigarettes, in US dollars, city by city. And yes, this was inspired by the lyrics of the song Cigarettes and Alcohol<\/a>, from Oasis\u2019s 1994 debut album Definitely Maybe.<\/p>\n

Melbourne\u2019s Oasis basket comes to US$111.20 (about A$160). That\u2019s slightly ahead of Sydney at US$109.50 (A$157), but roughly double the equivalent basket in New York \u2013 US$54.10 (about A$78). <\/p>\n

The Oasis index might sound silly and fun, but like several other \u201cnovelty\u201d metrics, it can actually give us some real economic insights \u2013 and not just the cost of a night out. <\/p>\n

Economists have spent much of the past 50 years trying to show how unusual indicators such as hemlines, lipstick and underwear are informal barometers of the economy. <\/p>\n

Don\u2019t look back in anger<\/p>\n

The Oasis index lives in a much drier document from the Deutsche Bank Research Institute: Mapping the World\u2019s Prices 2026<\/a>. <\/p>\n

Now in its tenth edition, this annual report is a global cost-of-living map tracking wages, rents and prices of items such as coffee and taxis across 69 cities.<\/p>\n

That means this year, we can look back a whole decade. If you\u2019re in Melbourne, I hope it\u2019s not too upsetting to learn that the Oasis index shows the same round of beer and cigarettes cost US$59 (A$84) in 2016. The cost has risen by 89%. <\/p>\n

The report clearly calls out the reason why Melbourne and Sydney are top of the leaderboard: heavy and consistently rising excise tax on alcohol and cigarettes. <\/p>\n

The most well-known metric economists use to track inflation \u2013 the Consumer Price Index<\/a> or CPI \u2013 is designed to represent a wide basket of hundreds of goods and services so that no one of them skews the inflation story.<\/p>\n

The Oasis index does the opposite. It singles out two heavily taxed items. This can help us identify the effects of both \u201csin taxes\u201d and currency changes.<\/p>\n<\/p>\n

The lyrics of Oasis\u2019 1994 single Cigarettes and Alcohol inspired a novel cost-of-living metric.<\/p>\n

From lipstick to underpants<\/p>\n

The Oasis index is in good company. For years, economists have been using \u201cnovelty\u201d metrics, not only as a helpful proxy for what is happening in the economy, but also because these are often more relatable and easier for the public to understand. <\/p>\n

There are several famous examples. <\/p>\n

The hemline index, first introduced by economist George Taylor in the 1920s, is based on an assumption that the length of skirts rises and fall in line with the stock market.<\/p>\n

\"A<\/p>\n

The hemline index suggests skirt lengths rise and fall based on the strength of the economy.
\n Public domain via Wikimedia<\/a><\/p>\n

The theory \u2013 which despite some supporting evidence<\/a>, remains controversial<\/a> \u2013 is that when the economy is flourishing, hemlines get shorter. By contrast, in an economic downturn, hemlines get longer.<\/p>\n

Sticking to the theme of fabric, the men\u2019s underwear index<\/a> was coined by the late former Chair of the US Federal Reserve Alan Greenspan. <\/p>\n

Greenspan noticed that during tighter economic conditions, men cut back on a basic but hidden necessity \u2013 boxers and briefs. <\/p>\n

People can\u2019t see what you are wearing under your clothes, so its easier to delay replacing threadbare briefs to save money.<\/p>\n

Then we have the lipstick index<\/a>. This was coined after Est\u00e9e Lauder chairman Leonard Lauder noticed, in 2001, that lipstick sales were increasing even while discretionary spending fell. <\/p>\n

The assumption here is that in times of economic uncertainty, consumers resort to affordable luxuries rather than big-ticket items such as holidays or cars. Psychologically, we still want to reward ourselves, but at a smaller scale. <\/p>\n

And no roundup of unusual indices should exclude the Big Mac index<\/a>, introduced in 1986 by The Economist magazine to demonstrate purchasing power parity across the world. <\/p>\n

It prices an identical burger everywhere it\u2019s sold, so any gap in the US-dollar price is a rough signal of whether a currency is over- or undervalued.<\/p>\n

\"A<\/a><\/p>\n

The Big Mac index was devised by The Economist as an informal way to compare the purchasing power of currencies around the world.
\n winhorse\/Getty<\/a><\/p>\n

How we feel vs what the numbers say<\/p>\n

In Australia, while headline inflation may be easing slightly<\/a>, many of us don\u2019t feel any richer because wages haven\u2019t kept pace with prices. <\/p>\n

In 2022, US financial commentator Kyla Scanlon talked about the gap between the data and our perceptions in what she called the \u201cvibecession<\/a>\u201d. This is the idea that people\u2019s experience is not always reflected in economic indicators such as the CPI. <\/p>\n

While the CPI is still a helpful index to understand the impacts of inflation, these other novelty indicators can help us zoom in on how this plays out in the way we spend in the economy \u2013 particularly, how we cut back in some places such as going out rather than others. <\/p>\n

And for a public confused by<\/a> or reluctant to engage with economics, they can make it easier \u2013 even fun \u2013 to grasp. Definitely? Maybe.<\/p>\n","protected":false},"excerpt":{"rendered":"Many Melburnians were aghast to learn their city had won a trophy no one wants: the most expensive…\n","protected":false},"author":2,"featured_media":781333,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":["post-781332","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/781332","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=781332"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/781332\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/781333"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=781332"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=781332"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=781332"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}