Wash & Go

"Workin' at the car wash, yeah..."

Thanks partly to the popularity of such works as Freakonomics and The Tipping Point, unorthodox economic indicators are enjoying something of a vogue. Given how generally useless the slide-rule brigade were in predicting economic meltdown, unorthodox indicators have the bonus of being entertaining as well as no worse than the alternatives.

British magazine The Economist has come up with a couple of good ones in the past: as well as its famous Big Mac Index, which compares the real price of the accursed crap food across the globe (and has become virtually a standard text of economic studies) it has its amusing Recession Index which plots the number of mentions of the R-word in the media and, it turns out, serves as a useful predictive tool – particularly if you never read anything but The Economist.

Business New Europe came up with one of the best a year ago with its Christmas Tree Index, which conclusively proved a correlation between the height and bushiness of a country’s decorated fir trees and its general economic prospects.

I keep an eye out for such things myself. One I devised is the Landing Applause Index. When I first flew to the Baltic states I noticed that upon landing at an airport, Balts always applauded the captain as soon as the wheels touched tarmac. This was more than a decade ago and the applause used to be deafening. Over the years it steadily dwindled and on one or two flights almost disappeared completely.

I reasoned that as Balts became more more and more familiar with the delights of cheap and regular air travel, the novelty of the experience wore off – as did the memory of Aeroflot, whose flights I am told really brought the house down and would sometimes merit an encore when the plane actually came to a halt without any important bits dropping off.

But in the last year or so, the custom of applause on landing seems to have picked up. Might this signal a new wave of economic migration – a fresh set of fliers off to seek pastures new? I dunno.

Now I have devised a genuinely useful indicator – the Car Wash Index. The price of a hand car wash has halved in the last year.

Sud's law

The CWI is peculiarly suited to analysis for several reasons. Hand car washes are classic start-up businesses requiring little capital but often run by very ambitious young entrepreneurs, frequently “outsiders” of some sort to whom other avenues of endeavor are blocked.

Often they are in direct competition with one or more similar businesses just around the corner and they face interesting marketing choices: to play up the bespoke nature of the business or to try and undercut the automated machines at garage chains which have very limited price flexibility? Labour costs are low and infinitely negotiable, training requirements non-existent.

Eighteen months ago I saw car washes regularly quoting 7 lats for a basic wash and brush up, putting them well and truly into the category of luxury purchases – after all a car wash is one thing you can very easily live without, but a clean car is a status symbol of sorts if you have an expensive car or want to project a well-heeled image. It’s also handy if you’re thinking of selling your car and upgrading.

Today the prices have tumbled. In fact they have fallen so quickly and with such regularity that you can often still see one price pasted on top of another on the windows and placards of these soapy centres of shining capitalism.

For while the price hovered around the psychologically significant 5 lats mark, but an average price now seems to be 2.50 to 3 lats, and that frequently comes with the addendum “Reala Cena!” (Real Price!) suggesting that even those paying 7 lats used to get charged a bit more for unexpected extras.

So I’ll try to do a regular roundup of car washes and the latest developments in the ongoing price war. Once prices start rising again, it probably means something significant. The Baltic economic revival could emerge from a bucket in the hands of an Uzbek immigrant.

Advertisements

1 Comment

Filed under Uncategorized

One response to “Wash & Go

  1. News

    What about the ¨Our women are the most beautiful in the world¨ index. Not terribly scientific or economic, but for some reason it does seem to correspond with economic development levels in Europe. Baltic states, Ukraine, Russia, Romania are near the top of the index, meaning they are enthusiastic promoters of the ¨our beautiful women¨ concept but have low levels of GDO per hear. Germany, the UK, France are near the bottom, meaning they have the largest GDPs.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s