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In 2016, the relative value of £1,000   0s   0d from 1928 ranges from £55,020.00 to £431,000.00.

A simple Purchasing Power Calculator would say the relative value is £55,290.00. This answer is obtained by multiplying £1,000.00 by the percentage increase in the RPI from 1928 to 2016.

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 £1,000 0s 0d Commodity in 1928 there are three choices. In 2016 the relative:
real price of that commodity is £55,290.00
labour value of that commodity is £167,700.00
income value of that commodity is £299,900.00


If you want to compare the value of a £1,000 0s 0d Income or Wealth , in 1928 there are four choices. In 2016 the relative:

historic standard of living value of that income or wealth is £55,290.00
labour earnings of that income or wealth is £167,700.00
economic status value of that income or wealth is £299,900.00
economic power value of that income or wealth is £431,000.00


If you want to compare the value of a £1,000 0s 0d Project in 1928 there are three choices. In 2016 the relative:

historic opportunity cost of that project is £55,020.00
labour cost of that project is £167,700.00
economic cost of that project is £431,000.00

Calculate another value

What is the relative value of £ from in ?



 

 

Citation

Lawrence H. Officer and Samuel H. Williamson, "Five Ways to Compute the Relative Value of a UK Pound Amount, 1270 to Present," MeasuringWorth, .

URL: www.measuringworth.com/ukcompare/


Please let us know if and how this discussion has assisted you in using our calculators.

A Project is either an investment, such as construction of a canal or installation of a cable network; or a government expenditure, such as the financing of Medicare or a war. Also within this category are such items as the size of a government budget deficit, and the total assets or net worth of a company.
Income is a flow of earnings, while Wealth is a stock of assets. Earnings might be of a specific type of labor, such as a plumber or professional athlete, or the (average) earnings of a broad group of labor, such as unskilled workers. Wealth can be a financial asset such as bank deposits or a stock portfolio, or can involve a physical asset, such as real estate.
Commodities are (usually consumer) goods and services. Examples are bread, attending a rock concert, buying hamburgers, a visit to the dentist, and personal computers.

Real Price is measured using the relative cost of a (fixed over time) bundle of goods and services such as food, shelter, clothing, etc., that an average household would buy. This bundle does not change over time. This measure uses the RPI.

Labour Value is measured using the relative wage a worker would use to buy the commodity. This measure uses the earnings index.
Income Value is measured using the relative average income that would be used to buy a commodity. This measure uses the GDP per capita.
Historic Standard of Living measures the purchasing power of an income or wealth in its relative ability to purchase a (fixed over time) bundle of goods and services such as food, shelter, clothing, etc., that an average household would buy. This bundle does not change over time. This measure uses the RPI.
Economic Status measures the relative "prestige value" of an amount of income or wealth between two periods using the income index of the per-capita GDP.
Economic Power measures the amount of income or wealth relative to the total output of the economy. When compared to other incomes or wealth, it shows the relative "influence" of the owner of this income or wealth has in controlling the composition or total-amount of production in the economy. This measure uses the share of GDP.
Historic Opportunity Cost of a project is measured by comparing its relative cost using the cost index of all output in the economy. This measure uses the GDP Deflator.
Labour Cost of a project is measured using the relative wage of the workers that might be used to build the project. This measure uses the earning index.
Labour Earnings measures the amount of income or wealth relative to the earnings an average worker.
Economy Cost of a project is measured using the relative share of the project as a percent of the output of the economy. This measure indicates opportunity cost in terms of the total output of the economy. The viewpoint is the importance of the item to society as a whole, and the measure is the most inclusive. This measure uses the share of GDP.
The RPI is most often used to make comparisons partly because it is the series with which people are most familiar. This series tries to compare the cost of things the average household buys such as food, housing, transportation, medical services, etc. For earlier years, it is the most useful series for comparing the cost of consumer goods and services. It can be interpreted as how much money you would need today to buy an item in the year in question if its price had changed the same percentage as the average price change.
A Purchasing Power Calculator compares the relative value of a past amount of dollars to a present amount. A simple calculator uses only the prices of consumer purchases to do this whereas a complete purchasing power calculator, such as found in this website, uses various prices, wages, output, etc., depending on the context.