Friday, October 3, 2014

Having fun with 1938 prices.

Nice graphic showing a cross-section of prices in 1938 (Link HERE).  How have things changed?

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Source: Classic Pics on Twitter
Here are the same prices with the inflation adjusted figure in parenthesis.  In other words, if these individual 1938 prices kept pace with overall inflation then the amount in parenthesis would be what those items would cost in today's dollars.

          New House:  $3,900.00 ($65,788.85)

          Average Income: $1,731.00/year ($29,200.13)

          New Car: $860 ($14,507.29)

          Average Rent: $27.00/month ($455.46)

          Tuition to Harvard University: $420.00/year ($7,084.95)

          Movie Ticket: $.25 ($4.22)

          Gasoline: $.10/gallon ($1.69)

          US Postage Stamp: $.10 ($1.69)

          Granulated Sugar: $.59 for 10 pounds ($9.95)

          Vitamin D Milk: $.50/gallon ($8.43)

          Ground Coffee: $.39/pound ($6.58)

          Bacon: $.32/pound ($5.40)

          Eggs: $.18/dozen ($3.04)

One way to look at this:  If the number in parenthesis is GREATER than what you would pay for that good today, then over time the price of that good has risen LESS than inflation.  You can look at this as a good thing.

Couple of observations:

A stamp to mail a letter today is $.49.  If it had increased with general rate of inflation since 1938 it would be $1.69 today.

I am pretty sure just ONE class at Harvard costs $7,000 today so the cost of Harvard has increase MUCH more than the general rate of inflation.

A movie ticket (general admission, not discounted) is more than $4.22 today.

You might say the price of a new car has stayed the same.  You could buy a car today for $14,507 that one could argue is BETTER than a car built in 1938 in terms of features.

Probably gets beat on style, though! :)

It is interesting to me to look at history through the prism of prices. What do you see?

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