
US price levels 1665 to 2005, with 2005 = 100 - Anon84
http://oregonstate.edu/cla/polisci/faculty-research/sahr/pl1665.htm
======
mbrubeck
Here's the same graph with a logarithmic scale, which is better for comparing
rates of change across time:

[http://oregonstate.edu/cla/polisci/faculty-
research/sahr/pll...](http://oregonstate.edu/cla/polisci/faculty-
research/sahr/pll1665.htm)

And here's the source of both graphs, with links to raw data and more figures:

[http://oregonstate.edu/cla/polisci/faculty-
research/sahr/sah...](http://oregonstate.edu/cla/polisci/faculty-
research/sahr/sahr.htm)

~~~
thras
I disagree with the idea that the logarithmic graph is better. It makes it far
harder to see the major (and most important) feature of the first graph: a
period of relative stability in purchasing power between 1665 and 1945,
followed by rapid currency devaluation.

Your graph obscures that feature, and replaces it with no useful information.

The best piece I've read about the 20th century shift to our current regime of
inflation was Dalrymple's recent _City Journal_ article. <http://www.city-
journal.org/2009/19_3_otbie-inflation.html>

Sure, inflation is just a kind of wealth redistribution. But wealth
redistribution has certain effects. In general, it destroys more than it
creates.

~~~
iamwil
"It makes it far harder to see the major (and most important) feature of the
first graph"

Not if one has learned to read logarithmic graphs. It took me a semester of
solid state electronics class (full of log graphs) to get the hang of it, but
once you're use to the idea that a straight rising line is exponential, it's
easy to see what you say is the most important feature: rapid currency
devaluation after 1945.

In fact, because it's a log graph, you can tell that it's rising faster than
base 10 exponential, because it's still a curve and not a straight line.

In addition, because it's a log graph, the large values on the right doesn't
dwarf the smaller values on the left. Now, you can see details of what the
price change was like locally in time across the board.

I'd say there's some useful information there in a log graph.

Now if you were saying that log graphs would be dubious to use for the general
public, then maybe you'd have something there.

~~~
thras
I can read logarithmic graphs. And it took longer for my brain to pick out
that feature in the second graph.

Remember that there is always information trade-off going to a log-scale. In
this case, I argue that the trade-off is not worth it. The first graph has a
clear and recognizable feature. The second graph is noisy.

------
Kadin
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.

~~~
jibiki
> 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>

1950: Beef is $.43/lb

<http://www.gti.net/mocolib1//prices/2009.html>

2009: Beef is $2.99/lb

~~~
m_eiman
"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.

------
pg
This graph seems off to me. I have a hard time believing the 80 years from
1665 to 1745 were a period of constant deflation.

~~~
cperciva
If you look carefully, it's not _constant_ deflation in that period -- over
those 80 years there's an average deflation rate of 0.6%, but at many points
the price index jumps 10% above the trendline.

I find these numbers to be entirely believable -- after all, this is a period
when the American Colonies are expanding rapidly, with resulting effects in
terms of specialization of skills and self-sufficiency. It's going to be far
cheaper to have something produced in 1745 by the local expert X-maker than it
was to import the same item from Britain in 1665.

------
indiejade
Hypothesis: possible partial cause of the sudden spike ~ 1945 - 1960 where the
graph takes off:

Introduction of television into mainstream society. Fueled by advertising,
everything "costs" more: entertainment is fueled by advertising. News is also
fueled by advertising. Advertising places a new layer of "value" on products,
causing the sudden perceived need to pay more.

Interesting data.

~~~
cperciva
The graph "takes off" where it does because economists figured out that
deflation harms the economy by encouraging irrational hoarding of money.
Modern central banks aim to keep inflation predictable, low, and positive;
several banks have explicit targets (usually 2%) which are chosen largely by
asking the question "given that inflation rates have inherent volatility,
what's the lowest average inflation rate we can have without volatility
regularly pushing it below zero?"

~~~
indiejade
This is true; regarding this specific time period, however, there were
definitely some large historical events that contributed to prices rising. The
logarithmic scale reveals it as well. Vietnam, yes, but also that whole
patriotism thing, news reporting, and "Buy American" which was, obviously,
fueled by the birth of the advertising age.

------
yanowitz
I made an interactive version of the chart with his later data (that now
starts in 1774) here <http://verifiable.com/charts/3937> (I also added the log
version so you can compare them)

------
jerf
Is this supposed to be proving any sort of a point?

Serious question; what's the point here?

