Inflation’s Hitting the Tooth Fairy

My six-year-old just mentioned that her friend got $20 from the Tooth Fairy. Is that the going rate?

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Twenty bucks is nearly four times the national average, which hit an all-time peak in Canada this year at $5.99. It’s possible the Tooth Fairy was feeling generous, but equally likely she forgot to make change before flying in. 

Given the predictability of this particular payday (20 teeth over about six years), tooth loss is a great opportunity to talk about, you know, fiscal responsibility. Sound about as fun as oral hygiene? Okay, we get you, but the tooth fairy really is a good way to table topics like saving and investing, even inflation (the rate of increase in prices over a given period of time). 

Let’s look at the numbers: 20 teeth x 5.99 = $119.80. Your child’s mouth is building an empire, so it’s as good a time as any to talk about what that money could do over time. 

Delta Dental is an American insurance company that has been tracking the tooth fairy’s financials since 2001. It turns out the amount kids find under their pillow is a good barometer for the overall economy. Your average baby molar fetched more in 2006 than it did in 2008 following the economic downturn. And the fact that rates are higher than ever this year is an encouraging sign of post-pandemic recovery. Another principle at play is what’s known as income elasticity of demand. This is the idea that when people (or fairies) have more money on hand, there are certain things they tend to splurge on disproportionately. Children are one of these items.

So while the TF’s feeling generous, take advantage of a happy time and a teachable moment—while it lasts. One columnist recently argued that given the terrible hours, unsafe working conditions, and non-existent travel budget, the Tooth Fairy may be ready to join The Great Resignation. Who could blame her? She’s an essential worker who doesn’t even get dental insurance.