Stevenson and Wolfers on tooth fairy inflation and the rising cost of parenting
Betsey Stevenson and Justin Wolfers were interviewed by NPR’s Planet Money about the implications of inflation on parenting. In the March 17 program, they talk about the rising cost of parenting through the lens of the tooth fairy.
According to Princeton University economics professor, Alan Blinder, also featured on the program, the Delta Dental insurance company has been conducting a nationally representative tooth fairy poll for almost 20 years. Over the last decade, dental inflation has averaged over 10 percent per year (as compared to actual inflation over the last decade, which has been right around 2 percent).
“It doesn’t surprise me to hear that the tooth fairy has outpaced inflation because the tooth fairy is one of those vehicles with which we give more to our kids,” says Wolfers. According to Stevenson, who had a similar discussion with fellow economists while serving as a member of President Obama's Council of Economic Advisers, the inflation-adjusted value of a tooth is roughly $3.