Calculated for Adjusted Dollars. How do I do it?

Factual Questions
1

Little question for you econ, stat types. I’m working on a story about my city budget and have data from 1982-2008. I want to normalize those numbers for inflation but am unsure about how to do so. Can one of you all assist?

Here’s the numbers, with inflation rate

Dollars	Inflation Rate

1982 $1,992,079 6.16%
1983 $1,971,012 3.22%
1984 $2,019,648 4.30%
1985 $2,151,198 3.55%
1986 $2,220,641 1.91%
1987 $2,908,037 3.66%
1988 $3,414,564 4.08%
1989 $3,716,075 4.83%
1990 $3,864,441 5.39%
1991 $4,522,669 4.25%
1992 $4,427,621 3.03%
1993 $4,561,170 2.96%
1994 $4,780,639 2.61%
1995 $5,255,203 2.81%
1996 $5,399,173 2.93%
1997 $5,599,475 2.34%
1998 $6,001,103 1.55%
1999 $6,324,561 2.19%
2000 $6,571,413 3.38%
2001 $6,610,358 2.83%
2002 $6,740,878 1.59%
2003 $6,894,124 2.27%
2004 $6,895,968 2.68%
2005 $7,187,095 3.39%
2006 $7,776,901 3.24%
2007 $8,005,980 2.83%
2008 $7,968,580 5.30%

Anyone? Bueller?

2

I’m a little confused by your data. I very much doubt that inflation was 5.3% last year. And there are difficulties in choosing which is the right measure to inflate by…

But anyway.

I’ll interpret this as saying that from 2007 to 2008 the general price level increased by 2.83%. Converting the 2007 number into 2008 dollars requires that you multiply the 8005980 by 100/(100-2.83), giving 8239147.885. That 100-2.83=97.17 is the price index for 2007, with 2008=100.

The next number: the price index is 3.24% lower than 97.17=94.02. 100 over that by your 2006 dollar figure givers 8271390.181.

That 100, 97.17, 94.02 is a price index. 100 over the index number for a year gives you the factor to inflate your dollars by.

3

As a suggestion, try http://data.bls.gov/cgi-bin/cpicalc.pl

It’s a Bureau of Labor Statistics calcuator, so it’s likely to be a reasonable source.