I would also add there may be an speculative factor as well, perhaps exacerbated by the pandemic.
Some price hikes on products and services just don't seem to have any economic rationale behind them.
And not all of them are quite obvious because you may get a full product or service with a reasonable price increase that follows inflation but of lot less value.
Take for example hospitality (hotels and restaurants) and home services (roofing, plumbing, landscaping)
My theory is with the pandemic many businesses realized they can reduce quality and level of service without impacting profits.
It's pretty normal today to pay $200/night for a hotel and not get room service for 4 days or more, or go to a restaurant and get a mediocre food and service and still be automatically charged 20-25% on the final bill, in some places even after tax!
My hope is we will reach a point of BS that businesses will start competing again for quality and service and gradually bring things to pre pandemic levels, but that may take a decade or more.
Meanwhile I am cooking a lot more at home, traveling to places where I can hike and camp and do a lot of small projects at home myself.
"It's pretty normal today to pay $200/night for a hotel and not get room service for 4 days or more, or go to a restaurant and get a mediocre food and service and still be automatically charged 20-25% on the final bill, in some places even after tax!"
To paraphrase the last psychatrist (Miss you!), if you go there it's for you.
I know it's upsetting to a lot of people and they don't like it, but if you can charge a higher price and still sell it, it is economically rational to charge that.
PS. Don't roast me, I'm not defending the practice, just the definition of economic rationality.
Some price hikes on products and services just don't seem to have any economic rationale behind them.
And not all of them are quite obvious because you may get a full product or service with a reasonable price increase that follows inflation but of lot less value.
Take for example hospitality (hotels and restaurants) and home services (roofing, plumbing, landscaping)
My theory is with the pandemic many businesses realized they can reduce quality and level of service without impacting profits.
It's pretty normal today to pay $200/night for a hotel and not get room service for 4 days or more, or go to a restaurant and get a mediocre food and service and still be automatically charged 20-25% on the final bill, in some places even after tax!
My hope is we will reach a point of BS that businesses will start competing again for quality and service and gradually bring things to pre pandemic levels, but that may take a decade or more.
Meanwhile I am cooking a lot more at home, traveling to places where I can hike and camp and do a lot of small projects at home myself.