Inspired by THIS thread I got nostalgic and started looking at old toy commercials.
The problem is, the prices some of THESE ads are quoting is wayyyy too high according to the inflation calculator.
I was born in 1960 and my family was middle middle class until about 1973 when we became upper middle class. Me and my siblings pretty much got everything we wanted for the times. But no fuggin’ way would my folks have paid the [2012] equivalent of $85 for a doll or plastic plane for any of us.
The calculator is supposed to be based on the consumer prices index which may not have toys as a factor. Toys are made to fit within an acceptable price range, so it’s unlikely a toy that would have to sell for $85 now would be made at all. On top of that the volume of toys needed for a minimum production run is now much greater, material and production costs are much lower, and the same toy may not cost much more to produce now than it did 50 years ago.
Yes and no. The inflation calculator attempts to map the costs of stuff we spend money on (food, clothing, housing, transportation, communication, etc). So the costs may actually buy roughly what $85 would buy now.
But you’re looking at it through 2013 eyes. For example, my kids have more and better toys than I ever did. Additionally, I have a number of things I pay for or buy that my parents didn’t have when I was growing up - cable TV, Internet, cell phone service, etc. We might be more willing to pay $85 for a toy if we have fewer overall expenses. And think of expenses in the hundreds of dollars that kids get now - smart phones and computers, for example.
Can you give us pricing examples and years so we can see and compare? I grew up in a working class family, but for Christmas or birthdays, my parents might spend $50-$75 in today’s dollars for something like a Transformer or lego set.
The inflation calculator is an average of hundreds of items. At best it gives a picture of how an annual household income compares over time. It should never be used to compare any individual item. Say that the average has gone up 5 times. That means that some items went up 50 times, some items went up 5%, and some items are 90% cheaper. Of course the extremes are gong to look completely wrong compared to the average. They are completely wrong.
Transformers toys in the 80s were easily in the $50 range, that has to be $85 or more considering inflation. (My parents got me Go-Bots. Feh.)
Super Nintendo games in the early 90s listed at $60. People gripe about the price of video games, but honestly the price has been, considering inflation, has actually been going down.
I don’t see how this makes sense. As you note, the inflation calculator can be used to compare household incomes over time (since it’s designed to reflect a basket of goods that make up a large portion of a household’s expenses). As such, we can also use it on a single item to see how its price changed as a proportion of a household’s income.
If an item only went up by 5% over 40 years, it means there was some other effect which caused the price to drop (mass production, technological improvements, demand effects, etc.). It also means that the item really did cost a lot more in the past as a fraction of income. Something that costs 1% of your income is fairly expensive no matter who you are or when you live.
Dividing the first into the second gives you a conversion factor of 7.77 or $1 in 1960 ==> $7.77 in 2012
When I entered $1 in the calculator I got $7.65 and they seem to use a different source for the stats although they may ultimately be derived from the same source. Can’t tell w/out researching it.
Then what’s the answer? One of the toys advertised is a plastic airplane for $14.99. Assuming that was 1960 the inflation calculator says that’s $114.62 in 2012 dollars.
No way would such a thing cost that much today.
So was 15 then really what 115 is today? If so that seems awfully expensive for a plastic toy with some flashing lights on it.
ETA:
Also, does anyone here know what some of those ads meant by “sold at food markets only”? I don’t remember any stores named “Food Market”.
Or were they talking about all grocery stores? I don’t recall many grocery stores have a large selection of toys when I was a kid.
We weren’t rich, but we were quite comfortable middle class. Then in the early 70’s my Pop made a good chunk selling some engineering designs or something square like that.
Something is wrong. It should be a strictly linear relationship. Take the price in 1960 and multiply by something between 7.6 and 7.8 dollars. There’s no reason it should randomly use one conversion factor one time and something else the next.
Why use toys as a measure? And why use toys from the '60s, which were of vastly different quality than today. The plastic used in toys from the 60s is hardly the plastic we use now and manufacturing methods are different.
Coca-cola is cheaper than it was in 1963, adjusted for inflation.
That’s why we don’t use single goods as measures of inflation. Some things will get relatively more expensive and others will get relatively less expensive.
Again, the inflation index does not apply equally to each good. It is a general estimate of the price increase across a wide number of goods, of which toys are a small part. You cannot take a single good, or even a single TYPE of good, and assume its price will follow the overall inflation rate. It doesn’t work that way.
Toys are a good that, relative to inflation, have gotten cheaper over time. So have clothes (for largely the same reason; they’re easily made overseas) airline travel (because of deregulation.) Coal today is cheaper than it was in 1960; I don’t know why, but it is so. Televisions are MUCH cheaper now. But other things have gotten more expensive. Cars are more expensive now, for instance. So are houses, and a lot of different kinds of food (but some kinds of food are cheaper.)
On the whole, inflation has caused prices to be about seven times higher than they were in 1960. But that is an average, and it’s a rough, subjective average, based on an arbitrary weighting of different prices to approximate a “bundle of goods.”
My point is, trying to do an apples-for-apples comparison for some things over more than a few years is difficult to impossible. Computers are notorious for quickly advancing beyond the point of easy comparison, and trying to go back more than a decade or so with them is foolish.
I don’t remember any stores named “Food Market”.