Re: Thomas Hale, farmer, died 1851, at Greet, near Winchcombe,Gloucestershire

Don Moody wrote:

Then maybe you'll finally realise the complete fatuousness of raising the issue at all, and the complete phoniness of the site to which you provided a link. It is as completely bloody pathetic and as intellectually unsound as being asked to measure the distance to the Moon in kilogrammes, or the age of Mr Hale at death in metres.

Don



You are knocking down a straw man (again!).

Such comparisons do have some value, albeit with severe limitations.

Your comments apply to making the comparison with the Consumer Price Index, where obviously, the bundle of products is in no way comparable.

But comparisons with say the GDP per capita or with the unskilled labour wage rate are more useful.

Obviously nobody would claim exactitude but exactitude is rarely being sought. Typically the question is much more general - was this a fortune? could somebody live comfortably off of this sum for a lifetime?

Even the CPI comparison has some value. It will tell you that a person could purchase x times as many consumer goods as the average person, this is a valid measure of relative wealth.

In your typical (unusual for an alleged scientist) fashion you condemned the referenced site either without reading it or without understanding it. The site explains several methods of calculation, acknowledges the limitations of each. It also gives legitimate examples of applying the relative measure.

For example comparing gasoline costs today with 1949:

"The "real" price of gasoline: Gasoline cost 27 cents a gallon in 1949 compared to around $3.00 today.* How has the relative cost of buying gas changed over the last 58 years? Presented here are two tables computing the annual "real" cost using our five indicators, one in 2006 dollars, the current number used for real GDP, and the other in 1949 dollars.While the two tables show the same trends, they do give a different perspective.

Using the 2006 table and the CPI and the GDP deflator, we see that gasoline was most expensive in 1980 and 1981 and the cheapest in 1998 and 1999. Today, the real price using these two measures is between 30 to 45% higher than the 58-year average for them.

As a share of the (approximate) Consumer Bundle, the story is even more striking. In 1981, a gallon of gas took 60% more out of the average consumer bundle than it did in 2006. Thus in 2006 prices, the relative price of gas in that year was $3.86.

The other indices tell a different story. Let us look at relative cost to an unskilled worker to fill up using 1949 dollars. That year the 27 cents it cost for a gallon of gas, took a certain share of the worker's wage. The interesting question is, has the cost as a share or percent of the worker's wage increased or decreased over time? The table shows that for the wage rate and price of gasoline in other years, this cost has fallen. Since wages have increased faster than the price of gasoline, by 2006 an unskilled worker spends only two-thirds as much, as a percent of wage, for a gallon of gasoline than the 1949 worker. The table shows that the $2.59 a worker paid in 2006 would be comparable to only 18 cents (in 1949 prices) if measured as a "share" of the wage.

When we use the GDP per capita, the cost has fallen faster. Looking at the table shows that a gallon of gasoline costs around 11 cents a gallon (in 1949 prices) if measured as a "share" of the GDP per capita. This is because in 1949, 27 cents was .015% of per capita GDP, while in 2006, $2.59 was .006%.

Finally, looking at what share of GDP of gasoline, we see that in 1949 prices, it is about 4 cents. This means that a gallon gasoline was a seven times larger share of output in 1949 than it is today. "








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