Royal Baby Bubble? Some Surprising Economics Around the Birth of Prince George
On bassinets, birthday pennies, and royal baby bets.
Expected total financial boost to the UK economy: $380 million
According to estimates, $134 million will be spent on royal baby celebrations (most of the funds will go toward alcohol), $123 million will be spent on souvenirs and commemorative items, and $117 million will be spent on royal baby-related books, newspapers, and DVDs.
Retail cost of a solid sterling silver penny minted to commemorate the royal birth: $42.99
The British government will be giving away 2,013 coins to babies born on the same day as the future king. According to English folklore, crossing a baby’s palm with silver bequeaths lifelong luck and prosperity to the baby. Investors might find silver's inherent luckiness questionable, though, especially when prices of the precious metal have been scraping bottom lately.
Estimated amount placed on royal baby bets worldwide: $1.8 million, as reported by CNN
People have bet on everything from the baby’s hair color to his future career. Most bettors were attempting to cash in on the baby’s recently announced name. But Prince George Alexander Louis’s name could lead to a few broken fingers. That is, with two of the baby prince’s names, George and Alexander, each having some of most favorable odds at 3:1 and 11:1, respectively, there’s sure to be some disagreement over the outcome among bettors and bookies. The worst off are those who were convinced of Will and Kate’s undying fan-love for Kanye West and Kim Kardashian and risked the long shot odds of 5001:1 on the name North.
Cost of a high-end Moses baby basket: $450
Sales of this woven, portable style of bassinet have been soaring since the Duchess of Cambridge bought one back in May. Thanks to the Kate Effect -- which caused a dress worn by the Duchess to sell out in stores only hours later -- the baby industry can be expected to experience a boost, said the BBC. Even in times of economic hardship, 26% of UK parents are spending $5,000 on a baby before he or she is six months old.
Globally, the baby products industry has been one of the most successful in the retail landscape in recent years, according to a market research report from IBISWorld, with an average yearly growth rate of 14.5% from 2008 through 2012 (and 11.3% growth in 2013 so far). Will the next royal purchase be a boon for baby product makers Hasbro, Inc. (NASDAQ: HAS), Kimberly Clark Corp (NYSE:KMB), or Mattel, Inc. (NASDAQ:MAT)?
Fee for hospital delivery and stay: $15,000
For that price, on top of the healthy delivery of her baby boy, Kate received a room outfitted with satellite TV and WiFi, freshly prepared meals, and a “comprehensive wine list” (presumably for Prince William). Compare that price to the average cost of birth in the US: $30,000 for a vaginal delivery and $50,000 for a C-section, without any hotel-style perks in the room.
Royal baby's estimated inheritance: $1 billion
According to Wealth-X, a company that researches ultra-high-net-worth individuals, Queen Elizabeth II’s estimated worth is $660 million. Prince Charles's worth is estimated at $370 million. Combine this with William's estimated net worth of $20 million and Kate's estimated net worth of $1 million, and the royal baby is flush.
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