How well has DM done after adjusting for inflation?
DM fundraising totals, adjusted for inflation
Looking at the totals Dance Marathon has raised every year since its inception in 1975, the upward trend over the 33 years looks impressive.
It raised almost $700,000 more in 2007 than it did in its inaugural year. Or at least, that’s the picture using nominal dollars. But in the alternate economists’ world, a dollar today is worth a quarter in 1975.
For example, using the value of 1975 dollars, DM brought in only $170,000 more in 2007 than when it began with 21 couples dancing in Blomquist Memorial Gymnasium. So while DM has exploded in size, inflation has exaggerated the true value of funds raised.
DM’s growth in 1985 from it’s inauguration was more than half accounted for by inflation. It’s like zooming in on a picture on a monitor and then expecting the printed result to be larger — inflation, by making a dollar worth less, is a visual trick. This is why adjusted totals give the truer and considerably more conservative impression.
Annual growth in DM totals, adjusted for inflation
And while it seemed DM did better from 2000 to 2001, adjusting the change for inflation shows that they actually saw a loss in total raised. Plotting the change from previous year and adjusting it for inflation reveals how DM hasn’t seen the constant growth its real totals would otherwise suggest.
* All calculations made using the Bureau of Labor Statistics’ inflation calculator that uses CPI with base year 1975.
Excellent article. I love seeing economics in the world.
Dan K
March 7, 2008 at 3:40 pm
“using the value of 1975 dollars, DM brought in only $170,000 more in 2007 than when it began”
yes, but those are 1975 dollars, worth considerably less than 2008 dollars(after all, the point of the article)
You dont buy groceries or pay for tuition with 1975 dollars(wow wouldnt that be a bargain) so when you say “only $170,000″ you are actually reading in your 2008 bias. 170,000 1975 dollars is an incredible amount of success. In fact, using that lovely calculator link and converting to 2008 dollars instead, that 170,000 number becomes 666,981.41: a truer value for our own conceptions. I understand the economic point, but its presented in such a way that it downplays the amount raised instead of just being amazed that it was ever possible to buy a fresh loaf of bread for a dollar
David
March 9, 2008 at 7:05 pm