What would it be worth today?

[Dennis]

Hi,

Is there a site that offers one the present value of currency from another point in time?

IE, a thousand pounds sterling in 1868 would be equivalent to what sum today?


dennis

[paddyscar]

Hi Dennis:

http://www.measuringworth.com/ukcompare/ allows for conversion of sums of money to present day value of pounds.

You can find a previous discussion http://talkingscot.com/forum/viewtopic. ... equivalent

Seems it has a lot of variances, but good luck in working it out

Frances

[Russell]

Hi Dennis

I'm glad you brought this topic up. My wife had a relative who was left a portion of a £16,000 estate in 1869 and we wondered what it would be worth in present terms.
We had a millionaire in the family

Most of it ended up in Australia though funding the establishment of large, profitable estates out there. The great-aunt who inherited her share of her husband's estate used it all up in a long and charitable lifetime. She was only in her early 30's when he died and she lived to her eighties, so she needed it. Nothing left to pass on

Russell

[Jamboesque]

I was going to post on this subject, but other stuff got in the way.

I have been using the Measuring Worth website for a while now but am still a bit confused which of the five calculations to use in my family history narrative with respect to the value of Inventories, Estates and Dispositions in todays term.

It is the wide variations between the values that have me confused with for example £100 in 1850 is roughly £8,000 using RPI, £10,000 using GDP deflator, £72,000 using average earnings, £100,000 using per capita GDP and £225,000 using the GDP.

For what it's worth I've been using average earnings in my summaries but I'd like some confirmation that this is the closest aproximation of projected value.

Anybody care to comment?


Jack

[Russell]

Hi Jack

The five values had me confused too and explanations I found bamboozled me still further – OK for economists but not for country bumkins.
So I settled for
1. Retail Price Index as too narrow being more to do with the purchasing power of my income for goods.
2. Gross Domestic Product deflator - Didn’t understand it but it appeared to be a rule of thumb balancer of some sort.
3. Average earnings - that I could understand since what you earn is, in part, a measure of how well the economy is doing overall.
4. per capita GDP - take the GDP and divide by the number of folk currently living on these islands – whether they are gross contributors or overall extractors from the national income.
5. GDP - Just what it says. The total wealth – tangible and estimated – of the UK.

I went for the Average earnings too as it relates to the contributing portion of Jock Tamson's bairns. Only a small number of people have unduly large slices of the GDP pie.
Too many people are net recipients of the nation’s wealth under the per capita GDP formula. Children, elderly, unemployed, unwaged ...............too vague to apply to an individual’s net value.

No doubt someone wiser can fill us in on what they really mean and which formula to apply to our type of enquiry. (Please [-o< )

Russell

[Currie]

Hello All,

As far as Family Historians are concerned I think the measuringworth site is getting over complicated. I’m sure it used to be a lot simpler or possibly I’m thinking of another site.

Generally people asking the question really just want to know what the purchasing power of say 800 pounds was in 1850. To make any sense of that you have to come down to the basics i.e. the cost of food and shelter. Someone like a labourer on a basic wage probably had his whole income consumed by just those necessities.

Current RPI or CPI figures are assessed by comparing the cost of a bundle of things such as food, accommodation, health, education, whatever etc. year by year. Some of those items would have been quite irrelevant or have different relevance to people’s lives in the 1850s. Even something as simple as a horse then, on average, was probably at least 95% work whereas now it is probably at least 95% fun and games.

If we say that 800 pounds then is worth 50,000 or whatever now, a poor man might say it’s a lot and a rich man might say that it’s peanuts. But if we say that the 800 pounds was equivalent to 10 times an average labourer’s or whoever’s annual income it is probably a far more accurate indication of its value than any measuringworth calculating machine can give you. That is if you also indicate that the particular occupation was then the lowest paid.

That way, if you were writing a family history, readers will have a good idea of the value without having a situation in 2107 of someone trying to figure out what the value of 50,000 pounds in 2007 is now.

The only thing you need to find out is the wage of a labourer and maybe other low paid occupations in the time period in which you are interested and that might be easier said than done. Incomes of higher paid occupations probably aren’t as relevant as they aren’t as closely linked to the cost of living i.e. the cost of staying alive.

For 1850s wage rates in the west of Scotland see http://www.google.com.au/books?id=c5kEA ... #PPA424,M1
Wages are also mentioned in The New Statistical Account of Scotland – 1845. On Google Books not all volumes appear to be findable. See also http://edina.ac.uk//stat-acc-scot . If you find what you’re after then it’s an easy calculation and you don’t have to ponder over how the measuringworth site came up with such and such a figure or which one of their figures to use.

However, if you must use measuringworth I would go for RPI because that is at least some sort of a measure of living costs. As I said before a labourer’s income was consumed by the very basics, even an average person probably lived from day to day, owned nothing and owed nothing.

I wont pretend to fully understand the different calculation methods but you only have to look at what people on average earnings today spend their money on: fun and games and toys and holidays and entertainment, oversize houses and interest on debt, electricity, heaps of stuff that will be in the garbage in 6 months and even on family history etc. etc. etc. I suppose that’s why the average earnings figure is so inflated. No money or time for that in 1850 and no Global Warming either.

My argument is quite possibly full of holes so please feel free to pull it apart.

Alan
LATER: MORE WAGES http://privatewww.essex.ac.uk/~alan/family/N-Money.html

[mean_genie]

You could also try The National Archives Currency Converter at


http://www.nationalarchives.gov.uk/currency


which has some useful background information, and is easy to use

Audrey

[Currie]

Hello Audrey,

Thanks very much for that info. The National Archives Currency Converter gives 100 1850 pounds a value of 5,853 today which is even less than the RPI result on the other site.

Any such figure, if used in a written history, will just become increasingly irrelevant as time goes by due to the effects of ongoing inflation.

If you select the Buying Power tab and input the 5,853 figure the 1850 result gives 500 days craftsman wages in building trade.

100 Pounds equals 24,000 old pence over 500 days equals 48 old pence per day which is consistent with the Building Craftsmen wages of the period on this chart.
http://privatewww.essex.ac.uk/~alan/family/N-Money.html

But for a common labourer in house construction in the West of Scotland in 1850 earning 12 shillings for each 57 hour week (according to the Google Book of the period) the 100 Pounds was the equivalent of what he was paid for 1,000 nine and a half hour days. i.e. assuming a 6 day week, over three years of hard labour. (If anyone’s interested better check my maths)

All the best,
Alan