Most common and necessary things like medication, education, housing, and everyday items like parking, internet, and communication become expensive for the commoner due to the formation of monopolies, branding, and marketing strategies. In this blog, you will find 12 things that should not cost as much as they do.
Medication
Pharmaceutical companies usually set the price for medicines based on research and development costs, potential market value, and production cost instead of the actual manufacturing cost. The median prices of the newly marketed drugs have only increased over time, and the inflationary impact on pricing in 2024 is “expected to be in the high single or double digits from 2023-24.”
Education
Over the past few decades, there has been a significant rise in education fees, especially for college students. Public universities provide affordable education, but their rates are also increasing yearly due to rising inflation, cuts in government funding for higher education, or university administrative costs. While financial aid is available, it must be enough to cover the rising expenses.
According to Trends in College Pricing and Student Aid 2023, “Between 1993-94 and 2023-24, the average published tuition and fees increased from $2,650 to $3,990 at public two-year, from $5,380 to $11,260 at public four-year, and from $23,300 to $41,540 at private nonprofit four-year institutions, after adjusting for inflation.”
Housing
One reason for the high cost of housing in urban areas is the rapid population growth arising from factors such as better job opportunities, cultural amenities, and better infrastructure. Applying basic economics, the high demand for urban housing and limited land increase prices. Developers fight for available spaces, pushing the price upwards. Data shows that in early 2024, home prices hit an all-time high, with the annual growth rate for home prices reaching 6.4% in February. Compared to early 2020, the overall US home price index increased by 47%.
Internet and Communication Services
Companies that provide internet and communication services have an oligopoly in their market structure. Internet providers often bundle internet, phone, and television services together, which looks appealing but has hidden costs. They pass the infrastructure cost on to the customers by increasing the price of their services. Compared to 2020, the prices for internet services and electronic information providers are 10.96% higher in 2024. For the same package, internet services costing $50 in 2020 would now cost $55.48 in 2024.
Weddings
Weddings are an emotional and intimate event where “wedding markups” apply. Venues, Photographers, Florists, Caterers, and other relevant service providers increase the prices, knowing weddings are very special and people may spend extravagantly.
Among the costs, the most significant expense is the venue. Wedding services provide all-inclusive packages, which can make you go out of your budget. In addition to this, popular wedding dates during the wedding season come with a high premium rental price. To manage costs, one should often involve careful planning and budgeting and use DIY aspects to maintain the costs.
Airline Fees
Airlines charge additional fees for checked baggage, carry-on fees, seat selection fees, food and beverages, entertainment, etc, contributing to the high cost of air travel. Booking a flight at the last moment is pricey due to last-moment demand. There has been a reduction in refund amount, whereas there are some nonrefundable airline tickets. The most significant is the fuel surcharges, which are included later in ticket prices and are uncertain and based on fuel prices.
Gym Membership
Operation of a gym in urban areas involves high rental costs and maintenance, which contributes to the overall price of membership and classes. They invest heavily in marketing to attract new customers. These marketing costs are adjusted and reflected in membership prices. The youth now are engrossed in fitness and willing to pay for gym memberships. Taking advantage of this opportunity, Gyms bring new customized fitness programs tailored to individual needs and goals with personalized attention and expertise.
Parking
The urban land value is high, valuable, and limited, and setting up a garage takes up significant space. This high land value translates into higher parking fees. The burden falls on customers as high charges cover the operational costs of maintaining parking garages.
Some cities implement dynamic pricing models for street parking, where prices fluctuate based on demand, location, and time of the day. Data showed that the prices for parking fees and tolls will be 14.32% higher in 2024 than in 2020. Put, parking, and tolls costing $5 in 2020 would now cost $5.72 in 2024 for an equivalent purchase.
Eyewear
Eyewear Industries is an oligopoly market. A few prominent companies, such as Luxottica and Essilor, dominate the market. The vertical integration of these companies reduces competition and helps them to maintain high prices. Eyewear sells at high retail margins.
Prescription lenses are customized to customers’ needs, involving complex processes and precision, driving the price. Additional features that are very relevant nowadays, like anti-reflective coatings, blue light filters, photochromic lenses(which darken in sunlight and high index materials(for thinner lenses), further increase the costs.
Pet Care
Keeping pets is now fashionable, and people are more attached to pets than before. This love and caring for pets adds to high maintenance costs like routine check-ups, emergency care, specialized treatments, regular and premium pet foods, special diets, insurance, grooming, and hygiene.
Pet food costs have increased by 25% since 2020, and vet care is now 11% more expensive compared to 2022. Many municipalities require pets to be licensed and registered, including annual fees over the pets’ lifetime. Pet ownership is another requirement, driving up the costs of keeping a pet.
Hotel Mini-Bar items
Mini bars are designed to encourage impulse purchases. Guests may buy it on a whim, and the convenience factor often outweighs the cost consideration. The costs are usually included in the overall package in all-inclusive resorts, making individual items appear costlier.
Cosmetics and Skincare
Companies spend large sums on advertising, influencer partnerships, and promotional events to build brand recognition and desirability, often passed on to customers through high prices. Brands prioritizing sustainability and organic ingredients will charge higher prices. When the product reaches the customer, the multiple distribution stages will drive the prices up like crazy. “In 2023, the city average consumer price index for cosmetics and perfume preparations in the United States stood at around 189.8 points, up from the previous year.”