A peek into inflation through the lens of Home Alone

Looking back, the 1990s can feel like a better time with fewer monetary problems, especially through the lens of film. However, economists say it’s not that simple.

In the 1990 box office success, “Home Alone,” main character Kevin McCallister buys a bundle of groceries for less than $20, and his childhood home in the Chicago suburbs sold for $875,000 two years before the film’s release, according to Realtor.com. While the home is undoubtedly more expensive, a quick inflation calculation shows the same amount of groceries would cost closer to $50 today, even though Kevin used a coupon, according to the U.S. Bureau of Labor Statistics.

“We are better off today than we were,” said Dr. Christopher Erickson, a New Mexico State University Interim Department Head & Professor of Economics.

Here’s a look at some of the other signs of inflation in the Christmas classic:

10 large pizzas

The film opens with a bustling household, a burglar disguised as a cop and a delivery man holding 10 large pizzas for $12 each from Little Nero’s.

Doing an inflation calculation, the pizzas in the film would cost $28.30 each in 2024 dollars, a $283 total, which helps explain the father’s exasperation when he complains about the price of pizza.

Albuquerque eatery Restoration Pizza offers a large pepperoni for $18.50. Ten of those rack up a bill of $185. That would be $100 less than the McCallister family paid for their dinner, when taking into account inflation.

“We are constantly getting better at making food, at producing food and so the cost of producing food has gone down relative to other products,” Erickson said.

A five-bedroom house

There is one thing the McCallisters owned that is definitively more expensive than it was in 1990: their home in the Chicago suburbs. The 9,000-square-foot home with six bathrooms and five bedrooms was built in 1921.

The house was first sold in 1988 for $875,000.

The home sold again in 2012 for almost $1.6 million. The home is presently up for sale for $5.25 million, which is a 140% increase from the 2012 price.

“November of 2020 compared to November 2012, we had an average sale price of $203,000 and change, that has increased by almost 47%,” said Morgan Cannaday, president of the Greater Albuquerque Association of Realtors.

Cannaday said there are a couple of reasons why houses are selling for such a large markup. There is a low supply and high demand, made worse by high interest rates.

“When the (2008) crash happened, a lot of home builders were left with half-built homes or fully built homes without buyers willing and able to buy them,” said Cannaday.

As a result, home builders have become more conservative, she said.

The market is also reliant on people moving, upsizing their housing as their family grows and downsizing when the kids leave. However, Cannady said some homeowners are shackled by a “golden handcuff.” If someone bought a home with a 3% interest rate, the idea of selling and getting stuck with a 7% interest rate is not enticing.

“It is a Catch-22,” Cannaday said.

Two shiny Buicks

The McCallister family had two cars: a 1986 Buick Electra Estate and a 1990 Buick LeSabre, according to the Internet Movie Cars Database.

The McCallister’s LeSabre cost $13,490 in the 1990s, according to a car ad in an Illinois newspaper from that decade. A comparable price today would be $33,406, and a new 2025 Buick sedan varies in sticker price between $23,700 and $45,000.

The LeSabre came with all the bells and whistles someone could expect in 1990: buttons to roll up and down windows, plush couch seating and a CD player with FM and AM radio.

A modern four-door Buick, the Envista 2025, has rear cameras, parking assistance and a touchscreen dash.

Comparing the price of a modern car to an old car is a bit like comparing apples and oranges. The technology in these automobiles is incredibly different, Erickson said.

This is a problem the statistical agencies who determine inflation run into all the time because inflation is calculated through comparison.

“The problem is, it is very hard sometimes to find the exact same equivalent product year after year,” Erickson said.

One half-gallon of milk

In line with the variable pricing seen with Buick, groceries can be more or less expensive depending on what is being purchased.

A great example of this is the half-gallon milk Kevin purchases in the film, which costs $1.14, inflation adjusted to $2.82. If a customer purchased dairy from Walmart, the cheapest option would be Great Value, at $2.08, and the most expensive grass-fed organic half-gallon is $5.27.

If you continue to follow Kevin through the store, he also fills his cart with toilet paper, eggs, bread, orange juice, two microwave dinners, laundry softener, cling wrap and aluminum wrap. The total for his cart is $19.83 and the inflation-adjusted cost would be $49.11 in 2024.

The real difference in cost is there are more expensive, organic options today. The rise in organic food didn’t happen until the later part of the decade, according to the U.S. Department of Agriculture. It was not until 1997 that most states had organic farming. Kevin could not have purchased $5 milk, even if he wanted to.