20 January 2020

Great-Grandpa Paid $300. How Much is That Worth Today?

The deed in front of you shows that your great-grandfather bought a piece of property in 1857 for $300. Do you wish you had some way of knowing how much that was worth today? Or perhaps you are looking at the 1860 census that reveals Great-grandpa owned personal estate of $2,000 and real estate of $8,000. Was he rich or just comfortable? Luckily, there are some excellent websites that will help you answer these questions and we will look at two of them this week.

MeasuringWorth: https://www.measuringworth.com/

The MeasuringWorth foundation is a non-profit group located in Illinois and the website is used by economic historians around the world. Hence, this is not a site for those who are looking for something simple. The focus of the site is on understanding relative worth in the U.S., the U.K., Australia, and Spain, and to provide comparators (devices for comparing similar objects and similar measures) for that purpose. The site stresses that "there is no one standard measure for comparing what a monetary value in the past is worth today," so it will give you multiple answers based on available data. You can go directly to a search from the links on the left of your screen, but a better idea is to begin by looking at the User Guide located under a tab in the navigation bar.

The User Guide will help you understand how the comparators work, and then you can do your search by clicking on the Relative Values links on the left or do a walk-through by clicking on the Tutorials link.

When you are ready to determine the relative current value of Great-grandpa's land, fill out the form (which only goes to 2018) as shown. You also have the choice to get a calculation based on today's Consumer Price Index (CPI) and you can see your results in a table format by clicking in the small white box. The results are sorted by relative price, relative wage or income, and relative output or project, and we learn that the land in 2018's prices would be worth between $6,500 and $8,900.

The Inflation Calculator: https://westegg.com/inflation/

A site with far fewer bells and whistles but still very helpful is The Inflation Calculator, maintained by a man called Morgan Friedman. This site uses the Consumer Price Index as well as government statistics and calculates prices from 1800 to 2019. The home screen is simply a form that asks for the amount and the years. When you have the fields filled out, click on "Submit" and get the results in just a few sentences. As you can see, that land is worth about $8,300 in this calculation. An interesting note, here, is the prices reversed at the bottom, so we discover that if Great-grandpa paid $10.62 for something in 1857, that would be worth $300 today.

Understanding that these are variable numbers is important in calculating the then/now value of money but either of these websites should help to give you perspective on your ancestors' worth.

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