Friday, November 28, 2008

Cost of subsistence at today's prices

In Stigler's 1945 Journal of Farm Economics article he gave a solution to the diet problem of minimizing costs subject to some lower bounds on nutrition and vitamin intake which gave a daily ration of just a little more than

1 lb of flour
1/7 can of evaporated milk
.3 lb of cabbage
1 oz spinach
3/4 lb navy beans (dried).

That's a lot of bisquit and beans but it actually sounds like a pretty tasty daily ration.

In 1939 prices that worked out to about 11c a day.

Today you can get a 5 pound bag of flour for about $2. I think the cans are smaller these days than in 1939 but a can of evaporated milk is about $1. Cabbage is 50c a pound and dried navy beans about $1.25 a pound. Spinach prices vary but I'll estimate that at $1 a pound.

So, at today's prices, the daily ration above would cost about $1.69 per day.

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