Saturday, April 29, 2017

The Tooth Index

Regardless of your political leanings, the one thing all agree upon is the need to push the economy forward. The debate, of course, is in levers needed to do that. Where do you push? Where do you pull? Where do you erect barriers and where do you tear them down? There is no shortage of opinions across the spectrum from politicians, business leaders and intellectuals as to the right mix. Even those whose profession is to study such things don't have unanimity of ideas. It was Edgar Fielder, Assistant Secretary of the Treasury for Economic Policy under Presidents Nixon and Ford who famously said, "Ask five economists and you'll get five different answers - six if one went to Harvard."

Even the mileposts by which that success is measured are hardly carved in stone. Do you look at industrial production? Debt ratios? Retail sales? All tell you something, but not everything. And like every statistic, they are subject to interpretation and nuance, something that our current state of dialog doesn't handle very well. Witness the unemployment rate. Most recently it was down and jobs were up. But does that mean more people are working, or that more people have stopped looking for work? President Trump said the numbers were a fiction when he was running for office, but now they tell the real story. What changed? Nothing really, other than where he was standing when he made the pronouncements.

And maybe those aren't the best metrics anyways. Tons of steel and yield curves are certainly indicators, but you and I deal with more mundane things that give us a window into how we're all doing. Consider the Hot Waitress Economic Index. While the name may give a nod to Bill O'Reilly, this index measures the number of people in service industry jobs with above average sex appeal, both male and female. It is assumed that more attractive people have an easier time finding higher-paying jobs in good economic times. Therefore, if stunners are forced into lower paying jobs, the economy is not doing so well. How to read this? Well, the next time you hit the Starbucks, and your Java Chip Frappuccino is made not but by a dead ringer for Jennifer Aniston or George Clooney but by a scruffy tattoo aficionado, you can assume Apple futures have some future.

Then there's the Tooth Fairy Index or TFI. Since 1998, Delta Dental has been surveying parents across the country as to the payout for a lost tooth. The poll collects average giving, and compares it to stock market activity as an indicator for the economy. How reliable is it? Well, in 12 of the past 13 years, the trend in average giving has tracked with the movement of the S&P 500. Take that, Milton Friedman.

And what does the TFI show this time around? Last year the Tooth Fairy paid about $290.6 million in the U.S. for lost teeth, a 13.5% increase from 2015. Cash payouts for a first lost tooth are up about 10% to $5.72, and first-tooth payouts are typically higher than average. Payouts are highest in the West at $5.96 ($6.89 for the first tooth), followed by the Northeast at $5.08 ($6.31), the South at $4.57 ($4.88), and the Midwest at $4.04 ($5.70). Not exactly a blue state/red state divide, but there you go.

If you dig deeper into the data, there is some plaque you need to brush away. While 89% of the homes the Tooth Fairy hits receive money, the fairy is also known to occasionally leave gifts that promote dental health, such as toothpaste or toothbrushes. And 56% of parents say the Tooth Fairy can be a little forgetful, neglecting to pick up the tooth on the first night. No word if that correlates to credit quality or not.

But like all things, one can see this changing with the times. After all, if you had to cough it up right now, would you have correct change for a molar? As such, don't be surprised when you hear about little Suzy losing her tooth and waking up to find not cold hard cash under her pillow, but an Amazon gift card. After all, spending online will continue to be key for growth. And so brushing isn't the only thing kids need to start doing early. Our economic future depends on it.


Marc Wollin of Bedford thinks he gave his kids a buck a tooth. His column appears regularly in The Record-Review, The Scarsdale Inquirer and online at, as well as via Facebook, LinkedIn and Twitter.

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