Genealogy and inflation calculators link to sites that calculate the present value of currency mentioned in primary source documents.
We’ve all encountered monetary amounts in primary source records that seem incredibly low. After my great-grandparents’ divorce, my great-grandfather owed $2.50 per week in child support at the turn of the century. Since he worked as a day laborer and timekeeper, I suspect that the $2.50 represented a significant amount for him.
To find a more precise answer to questions like this, I searched for online calculators.
This inflation calculator adjusts costs from year to year using the US Dept. of Labor Statistics Consumer Price Index (CPI) inflation index.
This is a more sophisticated inflation calculator.
The worth of monetary transactions is also difficult to measure. While a price, wage, or other kind of transaction can be recorded at a precise point in time, the worth of the amount must be interpreted. The father of economics, Adam Smith, discussed this very question in one of the most important books in economics, The Wealth of Nations (1776):
“The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it… But though labour be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly estimated… Every commodity, besides, is more frequently exchanged for, and thereby compared with, other commodities than with labour.”
One of the things I like best about it is that it it offers many different calculators:
Or perhaps you just want something simple and quick for a ballpark idea? USDA Inflation is the site for you. It offers calculations from 1914 to 2020.
Using Genealogy and Inflation Calculators
The answer to my question about 1905 child support?
In 2010, the relative value of $2.50 from 1905 ranges from $49.90 to $1,260.00. A simple Purchasing Power Calculator would say the relative value is $63.90. This answer is obtained by multiplying $2.50 by the percentage increase in the CPI from 1905 to 2010. This may not be the best answer.
The best measure of the relative value over time depends on if you are interested in comparing the cost or value of a Commodity, Income or Wealth, or a Project. For more discussion on how to pick the best measure, read the essay “Explaining the Measures of Worth.”
If you want to compare the value of a $2.50 in Income or Wealth, in 1905 there are four choices. In 2010:
- historic standard of living value of that income or wealth is $63.90
- contemporary standard of living value of that income or wealth is $135.00
- economic status value of that income or wealth is $341.00
- economic power value of that income or wealth is $1,260.00.
Pretty nifty, eh? Can Genealogy and Inflation Calculators like this help your research?