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I don't quite get it. What is this data based on? What goods are included? The price of food, for instance, has fallen dramatically just in the past 50-75 ye
by Kadin 17y ago
I don't quite get it. What is this data based on? What goods are included?
The price of food, for instance, has fallen dramatically just in the past 50-75 years. In both percent-of-household-budget and real dollar terms, it's dirt cheap compared to what it used to be. So any CPI-type "basket" that includes food ought to show price deflation over time.
In the meantime, many things that would have been unthinkable luxuries have become regarded as necessities of one sort or another. I suspect the average number of square feet of living space has gone up dramatically, as has energy consumption. But to just factor that into "price" doesn't seem particularly fair, since the 'average' standard of living in 2005 is so much higher than in 1795.
The chart is neat but it needs more context.
- bps4484 17y agoI completely agree, except for the last line. This chart is worthless without any details as to how the numbers are calculated.
- jibiki 17y ago> and real dollar terms What does that mean? Obviously, you need more US dollars today to purchase food than you did in 1950, due to inflation. Does "real dollar terms" mean adjusted for inflation? http://www.gti.net/mocolib1//prices/1950.html http://www.gti.net/mocolib1//prices/1950.html 1950: Beef is $.43/lb http://www.gti.net/mocolib1//prices/2009.html http://www.gti.net/mocolib1//prices/2009.html 2009: Beef is $2.99/lb
- m_eiman 17y ago"real dollars" means something like "percentage of disposable income". Also it's impossible to make a meaningful comparison of things you buy for money today compared to things that were bought for money two hundred years ago. Back then a lot more people grew their own food, for example. And they didn't work for software startups and buy all their tech equipment from minimum wage factories in China.
- Kadin 17y agoYes, basically. "Real dollars" are dollars adjusted for inflation. I think it's a little more precise than just saying "inflation-adjusted dollars" because when people hear that, they automatically assume "adjusted using CPI," which is only one way to try and correct for inflation. It's a reasonably well-accepted way, but there are others. (E.g.: labor-hours are popular in some circles.) Cf. http://en.wikipedia.org/wiki/Real_versus_nominal_value_%28economics%29 http://en.wikipedia.org/wiki/Real_versus_nominal_value_%28ec...