What's a dollar worth?

Everyone knows that a dollar doesn't buy what it used to -- or does it? The U.S. Bureau of Labor and Statistics publishes a consumer price index (CPI) which is updated monthly. Check out their calculator that converts prices from yesteryear into today's dollars, adjusted for inflation.

For example, in 1981 a gallon of gas in the U.S. cost about $1.35. In today's dollars that's $3.05 - which is a few cents less than the current national averages reported by GasBuddy. Thus, it looks as if gas prices, in "real" dollars have not changed significantly.

However, when you compare from only a few years ago (e.g., 2002, when gas was $1.33) today's price, adjusted for inflation, should be only $1.52. You don't hear politicians and oil companies quoting that statistic.

Thus, the CPI is handy, but doesn't tell the whole story and it doesn't really explain price changes.

I wonder what movie popcorn "should" cost in today's dollars . . .


Pauline
teachmeinternet.com