The Vadai Index

The real price of everything, what everything costs to the man who wants to acquire it is the toil and trouble of acquiring it. Whats everything id really worth to the man who has acquired it, and who wants to dispose of it or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose upon other people.
That was Adam Smith.

I have always been a fan of vadais, if you don’t know what a vadai is, then you've probably not hung around a lot of Sri Lankan trains, roadsides or bust stops much. They are small, made of dhal and flour, fried, crispy and can usually include a little piece of maldive fish or a prawn or two. The prawn variety is known as an isso vadai, isso meaning prawns, and are extremely popular around Galle Face, before it was shut down that is (by shut down i mean Galle Face, not the isso vadai industry har har).

Excuse me while I clear up my watering mouth. Now vadais are generally very popular in crowded areas and a pack of 5 small maldive fish vadais (back when I was schooling, which was not so long ago) cost about 10 bucks. you'd get some fried chilies to much along with them and iv always considered them to be a tasty treat.

What do vadais have in common with indices and the theory of value? I hear you ask. Well I’m getting there so please do be patient.

So recently I was in Ratnapura on a Saturday for a funeral. Bussed it there alone and when i got there what did I see? You guessed it! a chap selling vadai in a little cart. So i walked over and asked for a pack of 5 maldive fish vadais (generally a bit smaller than your average chicken egg) and i dig out my wallet expecting it to cost about 20 bucks (allowing for inflation) and guess what? chap asks me for 30.

Ok. well I guessed times were hard and the vadais did look pretty crisp. So I shelled it out. So that was a 300% increase in price over a period of oh say, 3 years or so.

So the next day, im driving back from Galle with a couple of friends after catching some test cricket action and we stop at the Aluthgama bridge ‘cos of some accident of some sort and lo and behold, we have vadai seller walking his walk and talking his talk. How much? 5 for 10 rupees! I am like wow so inflation hasn't hit this area of the island has it? We enthusiastically buy 3 little paper bags worth of it. I take one out and suddenly get a bit confused when i realize that I am holding something that looks about the size of a Jumbo Peanut. Pop it into my mouth and can find absolutely no trace of maldive fish either. So that’s roughly a 300% decrease in size (factoring in the missing maldive fish) in vadai sizes over the past 3 years. Times are hard indeed.

So we have two contrasts under close to perfect conditions needed for empirical analysis.
Case 1- The size of the vadai remains roughly the same, while the price escalates to 300%.
Case 2 - The price remains at 10 rupees while the size shrinks to almost 1 third of its former size accentuated by the lack of a piece of maldive fish.

So thats either a 300% increase in price or a 300% decrease in size. So my common sense lead me to conclude, that since these prices and sizes would seem to be rather reasonable in the eyes of a vadai patron (afterall demand must exist, for them to keep selling) it looks like there has been a 300% decrease in value of money over thelast 3 years.

Sounds like a good indicator of the real level of inflation in the country to me. Maybe the Central Bank should consider initiating a vadai index. Or maybe even a basket index of all roadside ‘fast-food’ items if correlation is as obvious as it is with the vadai. Maybe I should start an island wide campaign to generate awareness. This could be a start.

1 comments:

Anonymous said...

that was the last industry i wanted hit by inflation !