What does the popcorn index teach us about the economy?

**SPEAKER_2** (0:05)
Take your flexibility beyond the mat with Paypal.
Pay nothing at checkout, then enjoy a flexible monthly payment plan that works for you. With no sign up or late fees, find yours and an easy way to pay with Paypal. Download the Paypal app to get started. Subject to approval, pay monthly consumer loans made by WebBank. Available through Paypalling, NMLS 910457 Learn more at paypal.com/paymonthly.

**SPEAKER_3** (0:30)
This is a Bose moment. You've been there, small talks going nowhere, but then the Bose speaker kicks in.
Music you can feel fills the room, and no more chat with Jenny from accounts. Your life deserves music. Your music deserves Bose. Find your perfect product at bose.com.

**Bababam** (0:52)
What does the Popcorn Index teach us about the economy?
Thanks for asking.
Figuring out how well the economy is doing might seem like the preserve of those working in big accounting firms or financial institutions, dealing with complicated graphs and calculations on a daily basis. But in reality, we're exposed to certain clues going about our everyday lives without even realising that they offer insights into our spending habits. An interesting example to look out for is whether people are buying popcorn in your local cinema. Why is that then? The theory of the Popcorn Index was introduced in 2009 by Rupert Gavin, then head of Odeon Cinema Group. The Great Recession had begun the year before and was impacting people's ability to spend money on going out. Gavin observed that weekly popcorn sales in Odeon Cinemas were mirroring the ups and downs of the FTSE Stock Index. The more people bought popcorn, the better the economy was doing.
And according to Gavin, at certain moments, popcorn sales actually led the FTSE. Writing for This Is Money in August 2009, he called the Odeon Popcorn Index an uncannily accurate barometer of the nation's financial prospects. He said it also bore truth across other European countries like Germany, Spain and Italy. What does popcorn have to do with the economy? Well, it's interesting to note that people didn't stop going to the cinema completely during the recession. Indeed, Avatar, which was released in late 2009, would break box-office records all over the world.
That's likely down to the reality that cinema provides a helpful form of escapism. As Gavin put it in This is Money, in a recession, many people prefer to maximise their short-term enjoyment and to forget about the economic doom and gloom. Still, people were more likely to think twice about spending a few extra pounds on popcorn, a snack that's certainly synonymous with a trip to the cinema, but also notoriously pricey.
OK, the popcorn index is unlikely to replace serious economic analyses, but nevertheless it's noteworthy as a quirky indicator. And in February 2017, BBC News revealed that there are actually a number of other similar examples in a feature with the headline How fast food reveals secrets of the economy. Oh, really? Like what? Well the Big Mac index is pretty well known. It's used to compare purchasing power in different countries based on the price of McDonald's most famous burger, the Big Mac. Meanwhile, the Mars bar standard was created by Financial Times writer Nico Colchester in the 1980s, after he noticed that the chocolate bar's price in the UK was neatly correlated with the buying power of Pound Sterling. There you have it. Now you know what the popcorn index is. In under three minutes, we answer your questions and help you understand the true meaning behind the trends, concepts and acronyms that are making headlines. Listen along and you will really know for sure.