Frogflation

The year is 2007. In Fife, Scotland, teacher Sharon Iddir has just finished a tiring day in the classroom - and she is longing for something to eat. With an hour's pay in her pocket, or £14.60, she could buy herself as many as 146 Freddo bars from the supermarket on the road to the school. It is a tempting thought - after all, the tiny 10p chocolate frogs are delicious.

Today, Sharon Iddir is still a teacher in Scotland. Her pay has gone up, so she now has £20.50 in her pocket when she walks into the supermarket. But the price of Freddos has risen even more. When she reaches the checkout till, she can only afford 82 Freddo bars. It is a real-term pay cut of 64 Freddos per hour.

This is the Freddo Index, and it was used by Iddir to explain to people across Britain why she decided to join other teachers and go on strikeWhen people refuse to work until their demands for changes have been met. .

Most people are familiar with the concept of inflationAn increase in the price of goods in an economy. . But some say we need a new way to show how inflation impacts people's lives.

Across the UK, nurses, teachers and university lecturers have all gone on strike this year. All of them are citing a "real-terms pay cut" as the reason. 

A nurse's starting salary has fallen in real terms by 8% since 2010. Experienced teachers will have seen a 13% real-terms drop. This may all seem rather abstract, but the Freddo Index makes it clear.

It is not the first time that food has been used for such purposes. The Big Mac Index is a way to compare the cost of living by comparing the price of a hamburger in different countries. The idea is that if a Big Mac costs the same in two countries, then the cost of living in those countries is also the same. 

Yes: Changes in the price of the Freddo bar reflect broader changes in prices across the economy, as suppliers adjust prices in response to increased costs of production or changes in demand. It explains real-term pay cuts in a way no other index does.

No: The Freddo Index is limited in its ability to fully explain inflation, as it only represents the price of one specific good. Moreover, inflation is a complex phenomenon influenced by multiple factors.

Or... The "Freddo Index" is a playful concept. It is not a formal economic measure but it helps us to understand a complex idea in a simple way. The same idea can then be applied to other products helping us gain an overall understanding.