Econ in the News: Delicious Prison Currency

A recent study by the American Sociological Association has found that the old staple of prison currency – cigarettes – has been replaced by instant ramen noodles in prisons across the United States. The rise of ramen in the grey markets of intra-prison exchanges can be tied to two trends shaking up the “traditional” prison economy.

The first trend to note is a decline in smoking across the United States. Over the past half a century, the percent of Americans who smoke declined from 42.4% in 1965 to 16.8% in 2014.

smokingrates

As a result, a critical aspect of using cigarettes as a currency – something widely accepted as a medium of exchange between goods in an economy – has broken down. Although the data does not explicitly state the proportion of people who smoke in prison has declined, I believe this is likely true given the overarching trend. A rise in nonsmokers then shift demand for cigarettes to other categories that more people would deem useful. There are also other external forces working against the cigarette currency – in 2004, the US government banned cigarette sales in prisons and eliminated providing 2 packs a week to prisoners. With a rapid decrease in the supply of cigarettes, the cigarette has become too valuable to prisoners to continue its use as a currency.

The second trend to consider is a rise in cost-cutting measures in American prisons, especially measures that affect food quality. Everyone needs to eat, and ramen is a cheap food fix for calories and reasonably good taste. Additionally, ramen is easily available in prison commissaries, creating a large supply to trade for other items with fellow prisoners.

cup-noodles-hed-2015

With the two trends of decreasing viability of cigarettes as a currency and the rise in prisoners’ desire for more food resources, instant noodles are well-positioned to serve as a new currency.

 

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