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Burgers take a bigger bite.

Anyone who has followed this column over the years knows my position on recycling: As an option on a dishwasher it's OK, but it should not be used to brainwash elementary school students into hoarding newsprint in the vain hope it will save a tree or two.

Economically, recycling is a bust; socially, however, the concept now has more respectability than your banker (not too difficult, given recent events). No one wants to be told that recycling usually costs more than it saves (again, just like your bank). Such statements raise more bile than asserting that cholesterol is good for you or that eating Cheez Whiz inhibits cancer (both of which have actually been supported in recent medical studies - so much for respectability in that profession).

Recycling old column ideas, however, works great, especially when we're talking about cholesterol and Cheez Whiz. That's right. Some of you have already guessed it: It's time to revisit the state of Alaska's Hamburger Index.

Several years ago, the Alaska Department of Labor was having trouble coming up with a measure of comparative living standards in Alaskan communities. As a result, some hungry sole began fishing for a way to determine relative in-state price levels. For this, the department needed a standard market-basket of goods, items that are purchased frequently and in similar quantities in each city and township from Juneau to Chicken and Adak to Anchorage.

Enter the McDonald's Happy Meal. To most folks, a Quarter Pounder with Cheese, large fries and a medium coke is as standard a marketbasket as there is (give or take the odd Egg McMuffin). In August 1988, the labor department collected the cost of these items from Golden Arches across Alaska and published the results in a comparative index that highlighted price level differentials.

At the time, I thought they had some overweight analyst with a heart problem doing the survey personally. (I should have known there was no free lunch. I've since been told they let Alascom do the walking.)

The original Hamburger Index was quite innovative, but it came in for so much ridicule (mainly from me) that state officials have yet to follow it up. Well, not to worry. I've done it for them. Unfortunately, it's enough to give you indigestion.

Since the state last looked at a Quarter Pounder with Cheese, a large fries and a medium drink in seven Alaskan communities, the aggregate price of these items has increased by more than 27 percent, an annual increase in excess of 12 percent on a compounded basis. The worst offender by far is Kodiak, where prices jumped 41 percent since the first survey. In 1988, fries there cost 99 cents; now they're up to $1.79.

That's just incredaburgable, but other communities larded it on as well. The overall increase in Juneau was 31 percent. The arches in Fairbanks beefed up prices by 29 percent. Strangely, the smallest changes were registered in the spots with the least and the most competition. In both Adak and Anchorage a McDonald's meal rose only 9 percent annually since the last survey.

Within categories, meat prices increased the least, up "only" 16 percent since two years ago. Potatoes were the big offenders, up even outside of Kodiak an average of 53 percent over the same period. This is particularly surprising, because the U.S. Commerce Department reports that the price of potatoes actually fell 3 percent in the last year.

By way of comparison, the U.S. Consumer Price Index has increased about 9 percent since 1988, two-thirds less than at Ronald's place. It could be worse. At least oil prices have kept up with Alaska's burgers and fries.
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Title Annotation:Alaska Department of Labor review of pricing in state of Alaska
Author:Safir, Andrew
Publication:Alaska Business Monthly
Date:Mar 1, 1991
Previous Article:In praise of Alaska's lifelines.
Next Article:Sled-dog race stirs up business; the economic impact of the Yukon Quest.

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