Self reported cost of living vs. CPI
September 29, 2008
The figure below shows the distributions of answers to two Gallup surveys – taken in the years 1937 and 2007 – asking the respondents for the smallest amount of money a family of four would need each year to get along in their community.
The ratio between the median amounts is about 43,700 / 1,500 = 29. The increase in the official measure of the consumer price index for the period 1937 – 2007 is by a factor of 14.4.
In 2007 the median household income was $50,233. The median household income for 1935-1936 was about $1,068. The increase is about 47-fold. The income of the median income of a family of four increased from $3,292 in 1947 to $75,675 in 2007, an increase of about 23 times.
Data: Gallup questionnaire database: poll #84, question 4, 5/24/1937; question 8, SOCIAL SERIES WORLD AFFAIRS, 2/1-4/2007. The 1937 question was phrased in terms of weekly sum of money needed – the data was adjusted to give the yearly sum by multiplying by 365 / 7. Inflation calculator. Statistical Abstract of the US, 1940. Census bureau, historical income tables – Housholds. Census bureau, historical income tables – Families.
Distribution percentiles ($1000’s):