Tracking Inflation with the Twelve Days of Christmas
Every year since 1984, the PNC Financial Services Group has calculated the "Christmas Price Index"—the total cost of purchasing all the gifts mentioned in the classic song "The Twelve Days of Christmas". This includes hiring lords-a-leaping, purchasing gold rings, and buying partridges in pear trees. Economists track this humorous index alongside official government inflation metrics to see how commodity and labor costs change over time.
The Origins of a Holiday Economic Indicator
In 1984, an economist at Provident National Bank in Philadelphia—which later became part of PNC Financial Services—devised a creative way to explain the concept of purchasing power to clients. Rather than relying solely on the standard government inflation reports, which track changes in the price of everyday household staples like bread, gasoline, and housing, the bank introduced the Christmas Price Index. This playful economic benchmark measures the real-market cost of purchasing every single item mentioned in the traditional English carol 'The Twelve Days of Christmas.'
Over four decades later, the index has become an annual financial tradition released every holiday season. By taking a rigid, repetitive list of antiquated gifts and pricing them across contemporary vendors, the project offers a tangible snapshot of how price levels change from one year to the next. What began as a lighthearted seasonal marketing concept has endured as an accessible educational tool for exploring macroeconomic principles, commodity swings, and wage growth.
Counting the Gifts: Single Set Versus True Cost
To calculate the index, analysts look at the song through two distinct methodologies. The standard Christmas Price Index calculates the cost of buying each of the twelve gifts exactly once according to their final count in the song: one partridge in a pear tree, two turtle doves, three French hens, and so forth, up to twelve drummers drumming. This single-tier tally encompasses 78 total items and serves as the core figure widely quoted in annual reports.
The second calculation is known as 'The True Cost of Christmas.' This version mirrors the cumulative structure of the carol itself, in which the singer receives all previous gifts again on each successive day. Under this full rendition, the recipient ends up with twelve partridges, twenty-two turtle doves, thirty French hens, and a grand total of 364 gifts—almost one for every day of the calendar year. Because the earlier gifts are repeated far more frequently, the True Cost of Christmas is heavily weighted toward the low-numbered verses.