How to calculate the cost of things in the Golden Era

[Marc Chevalier]

By today's standards, of course. For instance, I recently bought a vintage hat (from about 1930) that was originally priced at $12.00. Great, but how much were those twelve bucks worth in today's dollars?

There's a terrific online gadget that gives the answer. It's called a CPI Inflation Calculator, and it's free. All you have to do is choose a year (such as 1930), type in a price (say, $12.00) and presto: you have your answer.

Turns out that $12.00 in 1930 is worth $143.14 in today's dollars. Guess my vintage hat wasn't too cheap back then!


The CPI Inflation Calculator is here:

http://data.bls.gov/cgi-bin/cpicalc.pl


Try it out!

 

[Lauren]

I have played around with this site as well. It's quite fun to go through old catalogs and magazines and see how much things were! Vogue magazine, for example. You still look at the dresses and go "It's cute, but it's not worth THAT much!" Things weren't as inexpensive back then as we make them out to be!

 

[Sefton]

That's a useful and fun link. Thank's for posting it. It turns out that my $15.00
for Rolling Stones tickets in 1981 is the same as $32.87 now. Actually that's still cheaper than they want now....how about $100 for this years tour! Yikes!

 

[Mr. 'H']

Also, you can check out:

http://www.aier.org/cgi-aier/colcalculator.cgi

 

[scotrace]

Well I'll be danged.

 

[J. M. Stovall]

Very cool, thanks guys!

 

[Mid-fogey]

Well...

...inflation calculators can only give you a rough feeling for magnitude of direction. The ratios between different items change and there has been a relative change in the proportion of society that is "middle class" (whatever that means). Also the effects of income taxes, health care, technology, items produced at home, etc. cloud the issue.

In general, money in the golden era (even before the depression) was harder to come by and more dear.

 

[Shangas]

Awesome!

Ingersoll Dollar pocket watch in 1913: $1.

In 2009: $21.50

Parker Duofold fountain pen in 1921: $7.

In 2009: $83.20

Parker '51' fountain pen in 1941: $12.50.

In 2009: $180.90

Yeepers...No wonder people loved those pens so much. You spent a fortune trying to buy them!

 

[John in Covina]

One thing as to expenses, we have a lot of things that are proportionaly cheaper now than previously. A $4 sixpack of beer in 1975 would be $15 plus today! A lot of the clothing we buy today is very inexpensive.

Look at the price of a regular DVD player, today they can be had for under $100 and when first released they were hundreds and hundreds of dollars as is much in the electronics area new technology is pricey and then as time goes on it drops.

 

[Shangas]

Well anything is expensive when it first comes out. Even the Model T Ford. in 1908, one cost $850 or something. By 1925, that had dropped to about $200-$300. Still pretty significant for 1925, but a big difference.

 

[John in Covina]

Well anything is expensive when it first comes out. Even the Model T Ford. in 1908, one cost $850 or something. By 1925, that had dropped to about $200-$300. Still pretty significant for 1925, but a big difference.

************
I'd like to see that type of percentage price drop on the 350Z!

 

[DannyBoy]

A couple months back I was playing with these different online inflation calculators, to see how much some of my WWII era things sold for retail back in the day. Each calculator usually gives a slightly different amount for the same year. In the end I think I used a couple different sites and used them to compare modern and 40's grocery prices, which I thought would be fairly stable, although as Mid-fogey and John in Covina pointed out some items have changed value due to greater availability. I came to the conclusion, that for a quick and easy conversion for the 1940's, if you're out and about and don't have net access, is to just multiply by 10. So if I'm looking at something all I have to do is switch the decimal over one to the right, and I'm in the general ballpark (also that's about all the math my wee brain can handle...was never the math/sciencey type...[huh] ).

 

[Mid-fogey]

I read...

A couple months back I was playing with these different online inflation calculators, to see how much some of my WWII era things sold for retail back in the day. Each calculator usually gives a slightly different amount for the same year. In the end I think I used a couple different sites and used them to compare modern and 40's grocery prices, which I thought would be fairly stable, although as Mid-fogey and John in Covina pointed out some items have changed value due to greater availability. I came to the conclusion, that for a quick and easy conversion for the 1940's, if you're out and about and don't have net access, is to just multiply by 10. So if I'm looking at something all I have to do is switch the decimal over one to the right, and I'm in the general ballpark (also that's about all the math my wee brain can handle...was never the math/sciencey type...[huh] ).

...an article a few years ago on this that explained the changing ratio between things. They used the example of a string quartet playing for an hour. That would be four labor hours in the 1700s. It would take a shoe maker several labor hours to make a pair of shoes. Fast forward to today. The string quartet (if not recorded) takes four labor hours to play for one hour, but the labor in a pair of shoes from a modern factory is measured in minutes. Because these relative relationships change over time, it's hard to make a meaningful comparison after just a few decades.

 

[Diamondback]

Perhaps industrial goods would be a more stable indicator.

I find it interesting to note that each of the ten steam locomotives built for the 1938 20th Century Limited, state-of-the-art when ordered from Alco in 1937, would sticker-price at about $2 million today if the technology still existed to build them and their required components...

Thanks for the link to that BLS calculator!

----------------
Now playing: History Channel Club Classical Music Collection - Bach: Toccata and Fugue
via FoxyTunes

 

[Lincsong]

I inputed the price of my parents house of $11,500 in 1956 California. In today's dollars that calculates to $90,000. Even with the real estate meltdown, it comes nowhere near the $300,000 that unimproved homes are selling for in that tract. Homes in that tract last sold for $90,000 around 1980 which in today's dollars comes to around $232,000.

 

[reetpleat]

One big factor with real estate is supply and demand and the amount of money people make. A lot of people live in LA, and a lot of them make a lot of money, driving up the price of a limited supply.

Another big change is the price of food. it is much lower while the cost of housing is much higher.

the government still uses the same old calculator for poverty levels. this throws things off due to the high cost of housing, while the index is based on the price of food.

 

[Guttersnipe]

Great thread! The golden era and economics at the same time - I must be dreaming! Ya'll are making this humble finance students day!

Mid-fogey is quite right, the numbers which inflation calculators spit out can be somewhat less than meaningful.

Generally speaking, the bigger the numbers being calculated, the more deviation you will find and therefore the less the number you get will really tell you. The purchasing power of the dollar also does not always ebb and flow with inflation and is not reflected in simple inflation calculators.

For things like finding todays approximate cost of a 1940's $10 hat or $28 suit, they give a pretty good reference. But, as Lincsong found when he calculated the cost of his parents house, the dollar value had little real "coherent" meaning.

 

[Geesie]

It really is hard to get a good sense of these things.
Percent of your income income is much more important than dollar value for something. So it would help to see what the typical income would have been for your job back then.

Also, the rise of our "standard of living" has also burdened us with more "essentials." TV, computer, internet access, etc. How's our disposable income compare, as absolute and as a percentage of total income?

 

[Guttersnipe]

It really is hard to get a good sense of these things.
Percent of your income income is much more important than dollar value for something. So it would help to see what the typical income would have been for your job back then.

Also, the rise of our "standard of living" has also burdened us with more "essentials." TV, computer, internet access, etc. How's our disposable income compare, as absolute and as a percentage of total income?

Yes . . . also a very good point. One thing that is very interesting is that disposable income today actually represents a bigger percentage of our overall salaries.

Disposable income - salary net of tax withholdings - is generally greater today than it was during the 40's and 50's when expressed as a percent of total earnings. Tax rates in the U.S. were quite high post depression and into the 1950's; in many case they were higher than today, in fact.

 

[reetpleat]

It really is hard to get a good sense of these things.
Percent of your income income is much more important than dollar value for something. So it would help to see what the typical income would have been for your job back then.

Also, the rise of our "standard of living" has also burdened us with more "essentials." TV, computer, internet access, etc. How's our disposable income compare, as absolute and as a percentage of total income?

Further, people paid more for many appliances and such, expectingthem to last a longtime, and be repairable. Tvs or music players, or a blender would have cost much more, due to the quality and expected use of same. Also, things are now made in a place where hte economy is totally different and labor is much cheaper.

Another issue is that peole ate out much more, and accepted much lower standards of food and service on a daily basis, and also accepted a much lower standard in terms of living. It was not unusual for a man to live in a rooming house and take all his meals at restaurants. Much less for housing, but more for food. but less time spent cooking.