I have recently found data in Quebec Statistical Yearbook for 1914 that placed the price of a gallon of gasoline at 25 cents in Montreal (or 6.65 cents a liter). According to Kent Marketing’s database on retail gasoline prices without taxes, in 2010, the average price of a liter of gasoline in Montreal stood at 67.1 cents.
Correcting for inflation (2002$) , this means that in 1914, a liter of gasoline cost 110.87 cents compared to 58.04 cents. Many individuals have documented this downward trend of real gasoline prices. However, few have looked at the price of gasoline relative to wages.
According to the Institut de la Statistique du Québec, a machinist had an average real income of 47,659 $ in 2010. According to the manufacturing census of 1910 (available in the Quebec Statistical yearbook of 1914), the average machinist had a real annual income in Montreal of 6,650 $.
If we make the hypothesis that in both the worker of 1914 and 2010 had an average week of forty hours and worked 49 week per years, we can see how time of work was needed to buy a liter of gasoline.
In 1914, you had to work 19.6 minutes to acquire a single liter of gasoline. In 2010, you only had to work 1.4 minutes. This means that relative to wage, the real price of gasoline dropped 92 % since 1914. Of course, this percentage might in fact be higher considering that the workweek was longer in 1914 than in 2010.
I am currently trying to assemble a time series that will try to illustrate this long term trend for many products. So, if you ever do find books, magazines or old “Sears Catalogue”, please communicate with me at email@example.com and share it with me (at a price if necessary).
2 thoughts on “An exercice in price trends”
Just a thought, it might also be interesting to adjust the price for average mileage per liter to get an index such as: average time needed to work to be able to afford to drive 100km. I bet the drop is much more than 92% when taking into account the gains in internal combustion engine efficiency.
I’d have to get data relating to fuel efficiency, price of car and maximum speed (the time lost with a 1914 car that could not exceed 30 miles per hour rather than with a 2011 car that travel up to 60 mph legally and much more has an economic value )
But it would be indeed interesting to do such a thing