I should like a quick reference to a simple graph of inflation. Just one example, I read a reference to a prize of $200 paid in 1924. I would like to guesstimate what a prize with similar purchasing value would be today. This is not an economic interest but rather a satisfy-my-curiosity interest.
If you google “inflation calculator” there’s plenty of websites that will just do the math for you (how accurate they are, I don’t know).
The website Measuring Worth does this in a snap.
Type in 1924 as the baseline, $200, and 2010 for the comparison (most recent data available), and it will pop out an estimate toot sweet. It gives a simple purchasing power calculation of about $2550 in today’s dollars as the same purchasing oomph as 200 back in the day. Understand this is far from an exact science, though. What’s cool is that it gives a range of other answers, too, depending on what else you might be looking for.
Can I just nitpick and say that it’s “tout de suite”, not “toot sweet”? I thought you were talking about some sort of exotic online graphing technique when you wrote that.
Ah, I stand corrected, in recognition of a democratic language and all that.
Still, I have to weep a little at the freakish corruption.
Using 1982-84 as the base year, $200 in June of 1924 would be equivalent to $2659 in January of 2012
http://research.stlouisfed.org/fred2/data/CPIAUCNS.txt
(200 x 226)/17 = 2659
Oddly page one of Google images fails to provides such a graph, which is bound
to be available somewhere. I guess the Google algorithm people are too fucking
stupid to realize what a important data set it is.
Here is a blog cite from Google regular which has a small, low-definition graph
derived from questionable sources (“Shadow Government Statistics”, etc.):
Here is a link to the Federal Reserve cite which provides year-by-year consumer price
index increases 1800-2012 in tabular format:
I guess the Federal Reserve members are pretty fucking stupid too, not be able to
figure out how to provide a graph. But then they had to have Alan Greenspan
for a boss for about 15 years, and that is bound to make anyone stupid.
You do realize that one of my links is a graph - right?
Maybe they’re secretly really, really smart. Smart enough to understand that simple calculators of inflation are worse than merely meaningless; they actively make you stupider by pretending that meaning exists.
Measuring inflation today is a complex process. The Bureau of Labor Statistics has many pages on methodology, but a good place to start is their CPI FAQs. I’ll let them summarize it, but you can see for yourself how many different categories of goods go into the basket and what the limitations are.
This level of information cannot be extrapolated backward to 1924. At best, some raw approximations can be made.
Even today there are many critics of using the CPI as a measure of inflation. I don’t include the noisemakers on the internet, who don’t know even the basics of the calculations, but serious economists who try to devise more accurate or more meaningful measures. Some of their critiques also shed light on why the CPI is not a good historic tool.
As an example, take computers. I bought my first PC in 1984. Along with a printer, it set me back $5000. For that I got two floppy drives, but no hard drive. And the printer wasn’t a laser printer. I forget the CPU specs but they were similarly tiny. Today, a basic desktop computer and home office laser printer might go for $1500. (You could go cheaper but I’m trying to approximate what I had now.) Does that mean that computers have declined 70% in price? Superficially, yes, but it’s obvious that today’s computer offers many times the value of an earlier one. This is known as “quality change.” As the FAQ’s specifically state in the answer to question 8, commodity specialists work to try to account for these non-price changes, but almost everybody disagrees on the best way to do the actual calculations.
The farther back in time you go, the more of an issue quality change becomes. In 1924, the A&P grocery chain was flooding the country with 600 sq. ft. stores. In a battle that is exactly replicated by the accusations against Wal-mart over the past few decades, mom and pop stores were furious about the discounted prices that this allowed. But those tiny stores sold a ridiculously limited array of foods, sold no meat or refrigerated or frozen items, and sold no non-food items, not even toothpaste. You can look at the prices of a can of soup or a pound of apples but the total cost of filling a food basket is hidden under the costs of having to go to a half dozen stores many times a week, and by the total unavailability of thousands of products we take for granted today.
A further problem is that items have taken markedly different paths of increase. Some goods has increased in price by 10 times, others by 100 times. Wages have also varied tremendously, because most workers in 1924 were in the working class, with a thin later of middle class and a plating of the rich. That changed after WWII so that the middle class bulged to be by far the majority. Just trying to find comparable incomes to compare over that time is extremely difficult.
A graph of inflation is a bad tool for almost any purpose. Using one to think about 1924 is liking trying to building a birdhouse with a hammer. Even so, when I look at the first page of Google images for graph of inflation in the us I see several that cover the period 1924 to today. I would still recommend that the OP use the inflation calculator that several people have mentioned as an easier way to get an answer to the question.
So for $200 in 1924, I could buy a pretty sweet riding lawn mower?
Answer to my own smart-ass question: Of course not.
That’s why the previous post is spot-on. These calculators do a very poor job because they make apples to oranges comparisons of the relevant technologies and availability of goods.
Hey, a question was asked, I did my best to answer it. I assume everyone is familiar with the following truism: “There are lies, damned lies and statistics.” 
As opposed to the toot suite, where rich people at hotels stay when they have their cocaine parties.
It does help to have some ballpark figure in mind when reading an older price or salary. If people understand that 13 times is just an approximation and nothing more, then it’s useful. If they are seduced into thinking that every single thing can be multiplied by 13 to create an accurate picture of the times, then they’ve lost brain cells.
But your argument is something like saying “This hammer is worthless because it’s no good with screws!”
Inflation is a specific bag of assumptions meant to useful in making certain kinds of comparisons. While it can be used incorrectly, that isn’t the fault of the tool so much as the fault of the user. For a question like the OP’s, inflation is the correct tool to use, and it produces the best answer possible.
I have to disagree. My point is that using an inflation calculator will give you an answer, even a seemingly precise answer. But that answer may be accurate or may be wildly off, by an order of magnitude or more, for any specific item you use it on. The farther back you go, the more inaccuracy is built in. That’s the “best answer” only if your alternative is picking random numbers out a hat.
In fact my advice would be to **never **use an inflation calculator for pre-WWII figures. It’s sure to mislead you far more than set you straight.
Then I guess we don’t disagree. There are very few things that we can use these inflation calculators for that are somewhat better that numbers out of a hat.
Take houses, cars, food, medical care, college, a movie ticket, gasoline, or any one specific item and try to extrapolate that to how much such a thing would cost in today’s dollars, or in 1925 dollars.
The specific thing that you get is so vastly different from what you get today that the monetary comparison is all but worthless.
I’m reaching way back in my memory for this little tidbit, so be gentle.
Doesn’t the govt use some very specific basket of goods to do the calculation? So for example, if in the 50’s all dress shirts were made of cotton because that was the only acceptable material (work with me here) but then poly/cotton blend became acceptable, they might use the price of a poly/cotton shirt in the basket rather than the pure cotton one.
If that’s right, that would be one source of error. I’m sure there are others.