Model Railroding inflation rate,past 25 years

[willy6]

I recently found a mint copy of the 1979 WALTHERS HO scale catalog at an antique store with a MSRP of $5.00. I scanned through it and compared a few items listed then and now in the 2004 edition of Walthers for a price comparison. I listed a few items below FYI.

1979 2004
Kadee #5 couplers(#380-5) $2.20 $2.95
Athearn GP-9,UP (140-3154)pwrd $16.98 $44.50
Athearn 86' hi-cube (GTW) $5.00 $11.00
Atlas signal tower (150-740) $3.00 $7.75
Woodland scenics,Smiley's tow service $16.95 $26.98
Testors paint 1/4 oz. bottle $ .35 $1.19
Kalmbach Publishing
"Small Railroads u can Build" 48 pages $3.50 $12.95
64 pages
and "Modeltronics" had a Mantua built 4-6-2 pacific where they installed a sound system and constant lighting for a price of $159.95.
Idon't know what the inflation rate has been for the last 25 years but you can decide if the inflation rate has hit the MRR industry hard.

[Anonymous]

First class postal rate. 1979 - .15. 2004 - .37

[DSchmitt]

My pay in 1980 $1000/mo Today $5000/mo

[csxns]

DSchmitt you are doing good.Does the D stand for Doctor.

[DSchmitt]

QUOTE: Originally posted by csxns

DSchmitt you are doing good.Does the D stand for Doctor.

No, I'm a bureaucrat

[Jetrock]

Inflation rate, 1980 to present:

Year Inflation Rate
1980 13.58
1981 10.35
1982 6.16
1983 3.22
1984 4.30
1985 3.55
1986 1.91
1987 3.66
1988 4.08
1989 4.83
1990 5.39
1991 4.25
1992 3.03
1993 2.96
1994 2.61
1995 2.81
1996 2.93
1997 2.34
1998 1.55
1999 2.19
2000 3.38
2001 2.83
2002 1.59
2003 2.27
2004 2.45 (year-to-date)

Total inflation rate, 1980-2004: 138.05%

Source: http://inflationdata.com/inflation/inflation_rate/HistoricalInflation.aspx

[IRONROOSTER]

Consumer Price Index (1967 = 100)
Year Annual
1978 195.4
1979 217.4
1980 246.8
1981 272.4
1982 289.1
1983 298.4
1984 311.1
1985 322.2
1986 328.4
1987 340.4
1988 354.3
1989 371.3
1990 391.4
1991 408.0
1992 420.3
1993 432.7
1994 444.0
1995 456.5
1996 469.9
1997 480.8
1998 488.3
1999 499.0
2000 515.8
2001 530.4
2002 538.8
2003 551.1
2004

2004 hasn't ended yet - so there is no 2004 figure yet. But the catalogs actually come out the end of the year before. So using 1978 and 2003 would match the catalogs. 2003 is about 2.8 times 1978.
Enjoy
Paul

[BR60103]

For what it's worth, in 1953 my first Lionel set cost $57.95 (Canadian). My father was paying either $50 or $55 amonth to rent an apartment at the time.

[Anonymous]

So maybe with the exception of the paint and the book, model railroad prices have risen pretty much in line with inflation? Seems like the Kadees actually went down in price!

[Anonymous]

To clarify. Kadees have not risen as much percentage wise as inflation.

[Jetrock]

Even the paint isn't that far out of line--it tripled in price. Kadees definitely seem to have held their value.

And, of course, anything tech-related went greatly down in price and up in performance--where was command control, CAD software, built-in sound, etc., in 1980?

[Anonymous]

Jetrock

You're right about the tech-related stuff. In the 80's there were a series of articles about linking a PC to a layout to run turnouts etc and I remember thinking "man, that would be expensive." I think the computer used was a 286 machine. Given the price of computers now - especially older machines - interfacing a computer with a layout is massively relatively cheaper than back then.

"Mid tech" item also have not risen as much as inflation. I remember when I was in, I think, Jr. High (late 70's) saving my birthday and Christmas money and whatever else I could earn for about 6 months to buy a MRC Controlmaster X. I think the price was about $40.00. For about the same amount now (or maybe slightly more) you can get a MRC Tech pack that is highly superior.

So some things have gone up, some have stayed stable and some things have actually gone down in price.

[Don Gibson]

JUST check out the number of US Dollars to buy an oz. of Gold 25 years ago.

50 years ago it was $24 oz. and we kept a sufficient amount in Ft Knox to cover our paper 'Gold Certificate' s . Check your local newspaper for TODAY'S price. Also notice our paper money no longer says's "Redeemable upon demand in Gold" (or Silver) .

25 years ago, what did one pay to get into a Movie? - If you were old enough.

[Jetrock]

I think I have a late Seventies MR with an article about computer interfacing using an Apple II, featuring a home-brewed 8-bit interface card to plug into the Apple bus. It doesn't seem that long ago that computer people still built their own cards from kits (or homebrewed 'em) to add functionality to their 8-bit home computers...

[Anonymous]

And how much was that Apple II compared to what you can get today? I find that simply amazing. My dad first got the computer bug in the mid 70's (back then only serious hobbiest did the micro computer thing). If he were alive today he would be amazed, no shocked about the leaps and bounds made in the micro computer world. Of course I think he'd also be blown away by what is available today (RTR, BLI, Proto etc). Time have changed. But Model Railroading is still fun!

[ericsp]

QUOTE: Originally posted by csxns

DSchmitt you are doing good.Does the D stand for Doctor.

Remember, he lives in California. The median home price here is about $400,000 (if I remember correctly). Of course, San Diego, Los Angeles, and SF Bay areas really drive that number up (I think the median home prices there are over a half millon dollars). It has been considerable lower in other areas but the prices there are rising rapidly.

[rexhea]

QUOTE: Originally posted by ericsp

QUOTE: Originally posted by csxns

DSchmitt you are doing good.Does the D stand for Doctor.

Remember, he lives in California. The median home price here is about $400,000 (if I remember correctly). Of course, San Diego, Los Angeles, and SF Bay areas really drive that number up (I think the median home prices there are over a half millon dollars). It has been considerable lower in other areas but the prices there are rising rapidly.

Good Grief Eric! Come to Alabama and you can buy a whole neighborhood for that.[(-D][(-D]

[Vampire]

I remember buying a 2-truck Heisler loco when I was young. This was when AHM first imported them from Rivarossi back in the mid-seventies. The loco cost about $78 then, including tax! I had it in lay-away all summer, mowing lawns to pay for it. I think it was the single most expensive item on my layout at the time.

I think Walther's sells them now for about $220. Granted they are now DCC ready, have better detailing and a superior motor. I should have kept my old favorite though... sold it off when I got out of the hobby after college.[:(] [banghead]

[ericsp]

QUOTE: Originally posted by rexhea

QUOTE: Originally posted by ericsp

QUOTE: Originally posted by csxns

DSchmitt you are doing good.Does the D stand for Doctor.

Remember, he lives in California. The median home price here is about $400,000 (if I remember correctly). Of course, San Diego, Los Angeles, and SF Bay areas really drive that number up (I think the median home prices there are over a half millon dollars). It has been considerable lower in other areas but the prices there are rising rapidly.

Good Grief Eric! Come to Alabama and you can buy a whole neighborhood for that.[(-D][(-D]

The median price is about $220,000 where I live. In a suburb it is $280,000. Small cities away from larger ones have lower prices.

[Anonymous]

Wow. The median house price here in the megalopolis of Lubbock Texas is something like $80,000.

This is a really interesting topic. Maybe someone at Model Railroader would take a stab at writing an article comparing prices over the last, say 30 or 40 years and see what types of products have increased in price faster than inflation, which have increased the same and which has increased less. Have some pictures to show the difference in quality/detailing etc and talk about what is available now that wasn't then. I think it would be of interest to lots of folks and could even dispell some of the ideas that old farts like me have about "the good ole days."

[CNJ831]

dkelly - I know where Lubbock is but still consider yourself lucky to be in an area with a very reasonable realestate market! I'm 75 miles outside NYC and the median home price is something like $300,000 and going up 20% per year. Virtually all new home construction is at $400,000 and above. We also have plenty of nicer (but far from extravagant) homes in the one-half to one million dollar range a little closer in toward NYC if you're interested!

CNJ831

[Anonymous]

CNJ,

Really? OK. Go ahead and get me a realtor to buy me up about 10 of those million dollar suckers. lol. Of course, those houses have basements I bet! Just try to find one out here in West Texas! Is it worth the price difference? mmmmmmm Well I'm sure my opinion would be a little different than the fiance's!!!

[CNJ831]

Lots of interesting points being bandied about in this thread so far but I think many posters have missed the reality of the situation. Most of the glaring rise in prices has occurred quite recently, not evenly spread over a quarter century.

The overall escalation in pricing looks even less ominous if one compares 1954 prices with those from 2004 and scales them out to the CPI or inflation rate (neither of which can be applied with validity to luxury item pricing). But the fact is that hobby prices rose _very_ slowly over the forty years or so following 1954 but dramatically in the past decade, far outstripping inflation.

As to the argument that items we are getting today far outdistance in quality what was available in the way of models 25 or 50 years ago, yes they do but remember that back then you were still typically buying items that were at or near the cutting edge of model railroading technology. Times change and technology advances but this doesn't always have to be reflected in an item's price. I can point out hundreds of items outside the hobby that are far better than they were in 1954 or 1979 but cost striking less today.

So, is the rise in pricing we've seen in recent times truly justified and in line with inflation? I have my doubts.

CNJ831

[Anonymous]

cnj
Excellent point. How about this? What is the demographics of model railroaders today as opposed to 1954? Are the prices higher lately because the average guy can afford more? Or have the higher prices resulted in people from specific economic brackets leaving the hobby or not entering at all? What segments of the hobby have risen more than inflation and what segments have risen less?

I would love to see a well thought out and researched study that would analyze the changes in the hobby since, say 1954 or 1964 in terms of price, availability etc. Maybe a comparison to other hobbies or leisure time activities could be included (I still think the price of taking a date to the movies is way higher than when I was in high school, but maybe its just my perception). I think that could turn out to be very interesting. If you look at some of the hot topics this summer (price, made in China, kits v RTR, DCC etc) I think such a study would be very well received (although the conclusions might not be!).

[MAbruce]

QUOTE: Originally posted by dkelly

cnj
Excellent point. How about this? What is the demographics of model railroaders today as opposed to 1954? Are the prices higher lately because the average guy can afford more? Or have the higher prices resulted in people from specific economic brackets leaving the hobby or not entering at all? What segments of the hobby have risen more than inflation and what segments have risen less?

I would love to see a well thought out and researched study that would analyze the changes in the hobby since, say 1954 or 1964 in terms of price, availability etc. Maybe a comparison to other hobbies or leisure time activities could be included (I still think the price of taking a date to the movies is way higher than when I was in high school, but maybe its just my perception). I think that could turn out to be very interesting. If you look at some of the hot topics this summer (price, made in China, kits v RTR, DCC etc) I think such a study would be very well received (although the conclusions might not be!).

It might be interesting to see this sort of study done, but I’m afraid that the key component of information that would make this study meaningful is impossible to access: Manufacturers financial history.

I my opinion, tracking inflation with MRR prices (and demographics, availability, etc) over the years would result in generally speculative conclusions. The real truth will only come out after analyzing the “hard numbers” from the companies. These numbers will truly show trends in costs, margins, sales volumes, and R&D impact on cost. As these companies are privately owned, they will never disclose this type of sensitive financial information.

I do see the same trends that CNJ831 noted, which causes suspicion, but it’s only a suspicion until proven otherwise.

Of course the argument can still be made that escalating costs create a general perception that this is a rich person’s hobby. So it would not matter if manufacturing costs truly justified rising MSRP’s, perception alone would keep people away.

[Paul3]

CNJ831 wrote:

QUOTE: But the fact is that hobby prices rose _very_ slowly over the forty years or so following 1954 but dramatically in the past decade, far outstripping inflation.

Well, I just happen to have a 1993 Walthers Catalog here. To use the first example given, here are the prices:

1993 2004
Kadee #5 couplers(#380-5) $2.95 $2.95
Athearn GP-9,UP (140-3154)pwrd $26.00 $44.50
Athearn 86' hi-cube (GTW) N/A $11.00
Atlas signal tower (150-740) $6.00 $7.75
Woodland scenics,Smiley's tow service $18.49 $26.98
Testors paint 1/4 oz. bottle $ .90 $1.19
Kalmbach Publishing
"Small Railroads u can Build" 48 pages $5.95 $12.95
64 pages
and "Modeltronics" had a sound system and constant lighting for a steam engine for a price of $124.80, but you have to install it.

BTW, an Atlas FP-7 cost $109.95, a LLP2K BL-2 (the only P2K, even tho' it was first released in 1989) was $64.95, and a Stewart F7A was $99.00.

Paul A. Cutler III
*****************
Weather Or No Go New Haven
*****************

[darth9x9]

It's all relative. I make more money now.....and I spend more money now.

BC

[CNJ831]

While I'm not about to sit down and write the thesis on the subject that dkelly's post calls for, I can offer what I consider to be some enlightening points.

Re the hobbies demographics, in 1956 MR's reader survey indicated hobbyists had a median age of 32.7 years, with 1 in 5 modelers being a teenager (in scale, not Lionel/Flyer). An extrapolation from an analysis of the MR surveys 1956-1993 indicates a current median age of probably a little over 55 years, with a teenage component that is insignificant in numbers.

The early surveys revealed that the average hobbyist was a young family man with a couple of children and an average income. Currently it is a man of late middle age, approaching retirement, an empty-nester, and at or near the peak of his earning potential. Note also that WGH has aimed its program specifically at late middle age individuals likely to be short term hobbyists but who will probably be willing to spend big bucks. All indicators I can find point to hobbyist numbers peaking about 1994 with a steady decline ever since. Undoubtedly, some have been driven out by rising prices and many more deterred from entering for the same reason.

If one looks at the inflation rate offered by one poster upstream, it indicates about a 25% rise between 1994 and today. On the other hand, the price of the "average" road locomotive has risen by up to 70% during the same period (not including top end items like the BLI,MTH,Heritage, etc. locos). At the same time Walthers rolling stock gained 80-100% in price, as did Intermountain and several others, especially if they went totally to RTR.

I agree, an in-depth study of the subject would make for some very interesting reading but short of one of the magazines taken on such a challenge, I doubt we'll ever see it.

CNJ831

[Anonymous]

CNJ: I totally forgot about the surveys that MR does. Really good summary you've posted. I doubt we'll see any poster here do up a detailed summary, which is why I kinda challenged the magazines to do one.

[CNJ831]

dkelly posts - I totally forgot about the surveys that MR does.

The key word here "did" not "does"! MR quit publishing reader surveys in 1993. Since they had been printing them every 3-5 years up until that time, this sudden cessation has led me to believe they were worried about the image that was being protrayed. Clearly, the average or median age figure was begining to indicate a man beyond his middle years. With the numbers also increasing by 0.8 years for every actual year that passed, the figures were indicating a rapid aging of the hobby, as well as the potential for a dramatic decline in its viability by perhaps 2010 or 2015. MR did publish one final survey in the middle to late 1990's but that was based on the NMRA's survey of its own membership, not MR readers. At that time, the NMRA's median age figure was already 55-60 and also increasing!

CNJ831