The discussion about “yesterdays money” vs “today’s money” is often difficult without real life data and comparisons. That is why quite a few of the above mentioned numbers are interesting. Also in my experience numbers from today have little if anything to do with numbers of the 1980ties or 70ties.
Out of memory, I did my PPL for about CHF 9000.- in 1983 using a fleet of Cessna 150ties and then bought my own for CHF 7000.- I invested some 20k into avionics over the years and resold the plane in 2000 for 15 k, a net loss of about half of my investment. My take home salary at the time I did my PPL was about 2500.- CHF after tax. and about twice that when I sold out in 2000. I lived in a flat which cost me 800 CHF/month then (single room) and 1300 CHF later (3 room). Money was tight but livable.
The main thing I notice is that while the numbers in take home salary change over the years and with age and experience, the buying force does not. I still work paycheck to paycheck, I still have the same concerns whether I can pay this or that, while I am fairly comfortable I am by no means secure. 1-2 salaries missing would throw me into a massive financial crisis. 2 years of missing the second income at home (due to Covid) was very noticable.
However, these numbers have not risen in any kind of relation to what happened to the new airplane market. The numbers for new airplanes are simply insane and have led to a decline in certified GA which imho is irrecoverable.
In the used market, it is less so, even though at the moment it is also a situation where prices are very high indeed. Comparing with the phase post 2008 to about 2019, prices have risen to a pre- 2008 level and beyond. My guess is they will normalize in the next two years somewhere in between, but right now, buying is impossible for many people, while it was a real possibility also for low wage employees before 2019.
I see the same in housing and other goods. House prices are insane, rental prices even worse. Personally I could not afford to rent a 3 room flat right now. No way, prices are in the 2500 CHF or more per month in our area. Small 100m2 1960 style houses are going for 1.5 to 2 million, where they went for 400-500k in 2000. What this does to society is divide it more and more and what it does to GA is deny access to a sizable part of interested candidates and rise opposition by envy and frustration to a new height.
I have no clue where this is going. People talk of bubbles in housing and GA, so far prices are still rising and rising. In the end I suppose what this will mean is that the money itself devaluates, as you can’t buy anything meaningful even with amounts which used to be insane proposition to most people. 1 million used to be a fairy tale sum for the general population, nowadays it won’t buy you a terraced 3 room house in any large city. I just hope things don’t go the way they did in the 1920ties where a beer cost 10 million marks in Germany. But who knows.
Yes; all these discussions of inflation depend heavily on what you spend your money on.
As mentioned some way back, if you buy “gadgets” or anything “technical” then you are spending way less than ever before. Even in the business/professional sphere, you can get say test equipment for far less e.g. a scope which cost 20k 40 years ago can now be bought for 2k. Cars are probably relatively neutral but are much more affordable in reality due to finance deals.
What costs more is houses. But these were never easily affordable on the average (male) salary. An “exec” was just about ok alone, otherwise it needed 2 of you. Same today, though I’d say less affordable, but then a couple buying their first house isn’t likely to be getting into GA (they will probably be working on having kids, which will for sure soak up your money, and everything else) so it is back to the question of the make-up of the basket of items used to measure inflation.
The current bubble in plane prices will burst. We are seeing the broad effects on society due to coronavirus. So much has changed in the psychology. Loads of people who have options have decided to chuck in the rat-race, which is why there is such a shortage of workers in all the “crappy” jobs which we all rely on “someone else” doing 
Other psychological effects triggered the panic buying evident in many sectors. The “chip shortage” is almost totally artificial, and will eventually collapse in a bloodbath.
This is an interesting topic. Some of my figures: when I did the flight school in Finland in 1972, it cost 2700 Finnish marks, theoretically 450 euros if we count the exch rate of 6 mk=1 e. At that time C150 was about 40 000 mk, AA-1 37 000 and MS880 in between. Renting two-seaters was 60 mk/hour, 4-seaters 75-80 mk. The starting salary of a mail man was 800 mk/month, really high salaries were about 1600. Car gas was about 0,7 mk/liter.
Today this mailman gets 1700 euros/month and car gas is 1.8 e/liter. High salaries go around 4500 e/month.
Commercial PPL-licence takes about 16-20 000, renting 2-seaters in commercial flight schools about 180-200 e. And like Gallois mentioned, a flying C150 goes around 40 000 – so the same numbers as 50 years ago, just the currency has changed. There you can try to figure out how many liters of gas the mailman can buy or how many months it would take to pay the flight school or rent a plane…
In both cases he can buy about 1000 liters of gas/month, paying flight school takes twice as much work today, renting the plane 1,5 as much work. In 72 he could buy C150 for 50 months, today perhaps a little used ultra, which is pretty much the same. So in general it is more expensive today, but owning a plane is much cheaper today, because the rules and regulations are less strict than they used to be (talking about Finland only).
And after all, today everyone can have a mobile phone, a car or two, computers, mostly an own house, shops are full of fruits which we did not even know on those days etc. Generally taken life is much cheaper and easier today. So if you don’t smoke etc. I bet, you can easily have an own USED airplane today. That sure has changed. You don’t need even that 40 000 for it – not always even half of it, if you accept the same kind of planes which we used to fly on those days.
So in my opinion this time is overall much better than 1972 used to be!
As a hoarder of old flying magazines, one thing I have noticed is that the prices on Planecheck give or take the odd spike are the same now as when they were listed at when new. It doesn’t seem to matter which aircraft or which year.
Maoraigh wrote:
£70, about 150 years ago
Wow. Old money 
172driver wrote:
AFAIK that’s still the case.
Just checked AOPA and you’re right. It does say the depreciation method changed in 1981 and again in 1987 so I might have been thinking of this. For clarification depreciation only applies to business use.
Edit: Of course, the IRS aren’t silly and count the depreciation when calculating the profit made on the subsequent sale of the aircraft.
Capitaine wrote:
up to the 1980s there were tax breaks and accelerated depreciation on new aircraft,
AFAIK that’s still the case.
I had to give up flying in 1965 because the UK Government stopped subsidising private flying, and the cost of renting a C150 or Chipmunk went sky-high, over £6 per hour.
My house, bought in 1974, was 10x that value 15 years ago. Still rented out. Renting would be at a loss today if I was paying a 70% mortgage on 2006 value, at 1975 loan rate. (All debts payed off years ago.) This may catch buy-to-renters soon.
The last valuation of the house I live in was £70, about 150 years ago. Never been on market.
My first car in 1960 cost £310, 5 years old, 15,000 miles on clock. Max speed 68mph by the handbook. As a graduate with a postgrad
Education diploma I earned £680 per anum in 1962.
alioth wrote:
Relative to a typical middle class income, the cost of new aircraft has skyrocketed.
There’s a Mike Busch article where he compared the inflation-corrected prices for a new C182 and Mercedes S class maybe 40 years apart and came to the same conclusion. The Mercedes as a luxury vehicle is more price elastic than a budget car so is a reasonable approximation of an aeroplane. Unfortunately I can’t find it so don’t have the details, but it was something like 3 to 5 times more expensive proportionately.
Interestingly, another of his articles (chapter 43 of Airplane Ownership vol. 2) says that ignoring short term spikes e.g. the Gulf War, avgas prices adjusted for inflation have actually been quite stable.
A useful website is measuring worth, which compares historic relative purchasing power using other methods than simple inflation, e.g. share of GDP, or percentage of average salary. It’s interesting to look at some examples.
Another reason for aeroplane price increases is the disappearance of government support. For example, in the 1950-60s French manufacturers had (limited) free access to a state wind tunnel, which I don’t think is the case any more. Also, subsidies of French-made aircraft (currently €30,000 rebate plus VAT exemption) nowadays only apply to non-profit clubs, and not the wider market. Likewise, in the USA, up to the 1980s there were tax breaks and accelerated depreciation on new aircraft, where Uncle Sam was indirectly subsidising the general aviation manufacturers through their customers’ tax returns.
Is it correct, but wasn’t the Morris Minor priced at roughly half the average price of a 1950’s family home? This gives some idea of real estate inflation.
I think the Ukrainian microlight aircraft highlighted by Le Sving featured recently as a club trainer in Nepal in the very good series Flying to the ends of the Earth on Channel 4. These aircraft seem to show little real inflation compared to post war American two/three seaters.
I would suggest the Tecnams are not too far off, in real, relative terms, to 1970’s American SE light aircraft.
Another indicator is life expectancy. There used to be a twenty year gap between London’s East and West end, which has probably nearly disappeared. Literacy, child mortality, morbidity tables, may be more useful than gini coefficients. Although there is in some cases a correlation.
FWIW I remember the pound dropping from 160 BEF to 140 BEF, that must have been +/- 1970. Today it is at perhaps (the EUR equivalent of) BEF 50.
