Is there some way to adjust the prices described in my grandfather’s 1946 probate document into today’s dollars?
Developing some way to compare prices across time is always a challenge.
A few prices to describe the challenge:
- $146 – value of a cow in 1946
- $300 – value of a 1936 Ford V-8 sedan, nice enough to mention it had a heater AND radio
- $300 – John Deere Model D tractor, the then largest tractor in the Deere line
- $56.70 – monthly pay rate for corporal (E-2) with over 3 years service
- $69.30 – monthly pay rate for sergeant (E-3) with over 5 years service
How do convert those prices into something we can appreciate today?
Two previous posts provide some framework. The first describes the pay of soldiers during WWII to now, with a calculation of the ratio between the two. Another post lists the Consumer Price Index – All Urban Consumers in the 1940 and today.
Neither of the comparisons are perfect. First, the relative pay for members of the armed services was increased dramatically during the 1980s and 1990s. During that time I was on active duty many of the enlisted troops qualified for food stamps. An increase by factor of around 33 for the enlisted troops and around 26 for officers is an overstatement. That means the proportionate increase for soldiers is not a great reference point.
The consumer price index has increased by a factor of 13 fold between July 1946 and October 2019. That is not an ideal price indicator because the concept behind it is an average urban consumer. Prices for farmers, particularly when in near subsistence, would not necessarily correspond. However that is probably one of the better indicators we have.
Bringing those two factors together shows the relative relationship of those two indicators as follows:
- 33x – approximate increase for enlisted soldiers
- 13x – consumer price index increase for urban consumers
- 2.75x – ratio of higher increase for enlisted troops than general urban consumers, which actually is in the range of plausible based on my gut feel
So, I will look at the inventory of my grandfather’s estate using multiplayer increase of 13 fold. In other words $1 in July 1946 will be adjusted to $13 today.