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March 30, 2010

Inflation at the movies

One of the big movies of this year, "Avatar," is being called the box-office leader of all time. But is it?

Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:

"No, it is not the leading revenue-generator, and it has nothing to do with what I think of 'Avatar' as a movie. And this is because when you hear these rankings, they have not adjusted for the changing value of the dollar.

"I mean, everyone knows if they sit down and think about it that 30 years ago a dollar bought much more than it does today; 50 years ago it bought even more. And yet these revenue numbers that you see for movies, the leading revenue-generating movies of all time, they don't adjust for that.

"And so this is actually something that is easy to do. And economists that have done this find that you get a much different ranking of which were the box-office leaders over all time when you do adjust for inflation. And let me tell our listeners what those are.

"The leader is still 'Gone With the Wind.' In today's dollars, 'Gone With the Wind' grossed $1.5 billion -- twice that so far of 'Avatar.' 'Star Wars' was number two; 'The Sound of Music,' number three. 'E.T.' and then 'The Ten Commandments' round out the top five."

Posted by deeshore at March 30, 2010 10:01 AM