Pizza-nomics: Pegging a Subway Ride to the Price of a Slice

$2.50 doesn’t go very far in New York City.
Two things it will buy: a slice of pizza and a ride on the subway.
Through a strange and delicate interplay of markets in New York, the cost of a subway ride has always run parallel to the price of a slice of pizza.

The economic axiom known as the New York Pizza Connection or Pizza Principle was advanced in the early 1980’s. The uncanny parallel was first noticed when the cost of a single ride was being raised to $2.00, the same as the then-prevailing price of a single slice. A look back showed that this economic law had held with remarkable precision since 1964, when both items ran for 15 cents. Price increases have moved in lockstep ever since.

The decades since the discovery have brought plenty of change to transportation and street food. State transit subsidies and deficits have come and gone for the New York City subway system. Pizza parlors have battled invading food trucks and the low-carb craze of the Atkins diet. Yet somehow, all the capital costs, union contracts, and passenger miles add up to flour, tomato sauce and mozzarella.

On the surface, the relationship might seem arbitrary—aren’t pizza and subway rides comparison-defyingly disparate? To a New Yorker, there’s nothing haphazard or esoteric about the connection. The city’s subway system and its pizza are both essential institutions that touch nearly all of New York’s citizens.

 

 

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