CPI: Was the Past Cheaper?

There have been many threads on the general topic of inflation,
the Consumer Price Index and the Boskin report. But I don't
remember any that treated it in quite this way.

USA TODAY April 9, 98 MONEY section carried a summary of a
Dallas Federal Reserve Bank study that translated the price of
goods and services  from dollars into time: the time that the
average US factory worker must work to buy a given item or
service.  The author of the study is W. Michael Cox, Dallas
Fed vice president.

Like the Boskin commission, this report concludes that the CPI
has overstated inflation, and that almost everything is cheaper
today (actually 1997 was used) than it was during the 1950's. 

Some examples: a pound of ground beef took 23 minutes of work 
time to buy then; today it takes 6 minutes. Others:

ITEM             1950's       1997
12 oranges        21 min      9 min
Pizza             57 min     50 min
gallon of gas    11.2 min    5.7 min
1000 mile flight  41 hrs    10.8 hrs
dishwasher        140 hrs    28 hrs
color TV          562 hrs    23 hrs


The study concludes that "today's middle class American's live
better than the robber barons of yesterday".  

But if you read my web page section on "Are THINGS Getting Better
or Worse?", you already knew that ;-)

The complete report can be viewed at:

http://www.dallasfed.org/publications/ar/pdf/ar_current.pdf

Note that it is a pdf file and is about a megabite.


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jim blair (jeblair@facstaff.wisc.edu) Madison Wisconsin
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