Why Mondelez Stock Hasn’t Gone Up

When we track the price of goods or services over time to measure inflation, we often neglect to account for the improvement that represents more value being delivered to the customer. For instance, if someone trades in a Toyota Camry XSE for a Lexus ES, we don’t describe the this switch as inflation even though the Lexus ES costs more because we understand that the latter has more features.

Likewise, even though the we use the same name “Toyota Camry” to describe the vehicle each year, it can be easy to just look at the price changes in the vehicle each year from 2008 through 2018 to calculate the inflation without realizing, of course, than many of the features available in the 2018 version were not available in the 2008 version.

If we wanted to calculate the inflationary effect, we would have to compare a hypothetical 2018 version of the … Read the rest of this article!