Many Melburnians were aghast to learn their city had won a trophy no one wants: the most expensive night out in the world. At least, that’s according to the ” Oasis index “, an annual metric from the research team at Deutsche Bank.
Author
- Meg Elkins
Associate Professor in Economics, RMIT University
The index tracks the cost of five beers and two packets of cigarettes, in US dollars, city by city. And yes, this was inspired by the lyrics of the song Cigarettes and Alcohol , from Oasis’s 1994 debut album Definitely Maybe.
Melbourne’s Oasis basket comes to US$111.20 (about A$160). That’s slightly ahead of Sydney at US$109.50 (A$157), but roughly double the equivalent basket in New York – US$54.10 (about A$78).
The Oasis index might sound silly and fun, but like several other “novelty” metrics, it can actually give us some real economic insights – and not just the cost of a night out.
Economists have spent much of the past 50 years trying to show how unusual indicators such as hemlines, lipstick and underwear are informal barometers of the economy.
Don’t look back in anger
The Oasis index lives in a much drier document from the Deutsche Bank Research Institute: Mapping the World’s Prices 2026 .
Now in its tenth edition, this annual report is a global cost-of-living map tracking wages, rents and prices of items such as coffee and taxis across 69 cities.
That means this year, we can look back a whole decade. If you’re in Melbourne, I hope it’s not too upsetting to learn that the Oasis index shows the same round of beer and cigarettes cost US$59 (A$84) in 2016. The cost has risen by 89%.
The report clearly calls out the reason why Melbourne and Sydney are top of the leaderboard: heavy and consistently rising excise tax on alcohol and cigarettes.
The most well-known metric economists use to track inflation – the Consumer Price Index or CPI – is designed to represent a wide basket of hundreds of goods and services so that no one of them skews the inflation story.
The Oasis index does the opposite. It singles out two heavily taxed items. This can help us identify the effects of both “sin taxes” and currency changes.
From lipstick to underpants
The Oasis index is in good company. For years, economists have been using “novelty” metrics, not only as a helpful proxy for what is happening in the economy, but also because these are often more relatable and easier for the public to understand.
There are several famous examples.
The hemline index, first introduced by economist George Taylor in the 1920s, is based on an assumption that the length of skirts rises and fall in line with the stock market.
The theory – which despite some supporting evidence , remains controversial – is that when the economy is flourishing, hemlines get shorter. By contrast, in an economic downturn, hemlines get longer.
Sticking to the theme of fabric, the men’s underwear index was coined by the late former Chair of the US Federal Reserve Alan Greenspan.
Greenspan noticed that during tighter economic conditions, men cut back on a basic but hidden necessity – boxers and briefs.
People can’t see what you are wearing under your clothes, so its easier to delay replacing threadbare briefs to save money.
Then we have the lipstick index . This was coined after Estée Lauder chairman Leonard Lauder noticed, in 2001, that lipstick sales were increasing even while discretionary spending fell.
The assumption here is that in times of economic uncertainty, consumers resort to affordable luxuries rather than big-ticket items such as holidays or cars. Psychologically, we still want to reward ourselves, but at a smaller scale.
And no roundup of unusual indices should exclude the Big Mac index , introduced in 1986 by The Economist magazine to demonstrate purchasing power parity across the world.
It prices an identical burger everywhere it’s sold, so any gap in the US-dollar price is a rough signal of whether a currency is over- or undervalued.
How we feel vs what the numbers say
In Australia, while headline inflation may be easing slightly , many of us don’t feel any richer because wages haven’t kept pace with prices.
In 2022, US financial commentator Kyla Scanlon talked about the gap between the data and our perceptions in what she called the ” vibecession “. This is the idea that people’s experience is not always reflected in economic indicators such as the CPI.
While the CPI is still a helpful index to understand the impacts of inflation, these other novelty indicators can help us zoom in on how this plays out in the way we spend in the economy – particularly, how we cut back in some places such as going out rather than others.
And for a public confused by or reluctant to engage with economics, they can make it easier – even fun – to grasp. Definitely? Maybe.
