Real vs. Nominal Prices

How It Works

The distinction between real and nominal prices is critical for understanding whether food is actually becoming more or less affordable. A pound of ground beef cost $1.30 in 1990 and $5.50 in 2024 — nominally, it has increased 323%. But after adjusting for overall inflation using the CPI deflator, the real increase is about 55%, meaning beef has genuinely become more expensive relative to other goods, but not nearly as dramatically as the nominal price suggests. The Cheeseburger Index primarily reports nominal prices because that is what consumers experience at the checkout. When the index shows a burger costing $3.29, that is the actual dollar amount you need today. However, for historical comparisons, real prices are more meaningful. In real (inflation-adjusted 2024 dollars), a homemade cheeseburger cost roughly $2.80 in 2010 and $3.29 today — a real increase of about 17.5%. This matters because wages have also risen: the median hourly wage was $16.30 in 2010 and $23.00 in 2024, meaning the "wage-to-burger ratio" (minutes of work needed to buy a burger) has actually improved slightly despite the nominal price increase. The BLS publishes both nominal average prices and CPI index values, allowing researchers to convert between real and nominal using standard deflation methods.

Related Terms

• Consumer Price Index (CPI) — A measure of the average change in prices paid by urban consumers for a fixed basket of goods and services, published monthly by the Bureau of Labor Statistics.
• Food Inflation — The rate at which food prices increase over time, measured as a percentage change in the food component of the CPI — historically averaging 2-3% annually but spiking to 11.4% in 2022.
• Wage-to-Burger Ratio — The number of minutes a worker earning the median or minimum wage must work to afford a homemade cheeseburger — a practical measure of food affordability that accounts for both price and income changes.