Research by ROBERT ERNEST HALL (1943- ) and CHARLES J. HITCH showed that, whilst prices represent the average cost of production and distribution, firms typically set their pricing policies by determining the average cost of production, and adding a profit margin which does not appear to vary with market demand.
The average hourly wage in 1939 was $.30 and the average income for a household in 1939 was $1,368. Almost a hundred years ago, in 1939, a car cost around $750 and a house about $4,000. You could drive to the store for $.10 a gallon, purchase bread for $.09 a loaf, and buy milk for $.23 per gallon.
How Much Were Homes in 1939?
In 1939, the cost to purchase a house in the United States was between $3,800 and $6,400. Renting a house cost approximately $28 per month.
Homebuilding back then was quite different from the construction industry of today. In 1934, the Federal Housing Administration (F.H.A) was developed, and although there was some regulation, it did not prevent an individual homeowner from building a highly customized abode (unlike the cookie cutter residences found in planned communities today). The main requirement was that the new home had to fit the aesthetic of the neighborhood. The three main home designs were California, English and Cottage.
Home appliances then focused on the needs of women and how to help ease the stress of being a “housewife.” Electric fans, electric (or gas) ranges, and electric washers were popular and typically built with a new house.
Average Cost for a Car in 193
The price of a new car in 1939 was roughly $700, with Ford being one of the most popular automakers. Fuel for the car was only about 10 to 19 cents per gallon. In 2019, there were 276 million vehicles on the road compared to 1939, where US car manufacturers produced less than 5 million vehicles.
How Much Did Groceries Cost in 1939?
Forget Amazon Prime and Instacart. In 1939, you either walked or drove to the nearest butcher or grocer and hand-picked and paid for your own items. According to the The People History, in 1939, ketchup cost $.09 for a bottle, sliced ham weighed in at $.39 per pound, peanut butter was $.23, and a dozen eggs averaged $.18 per dozen.
For entertainment, a guitar could be purchased for approximately $9, and a pair of roller skates cost less than $2. Even movie costs will shock a person of the 2020’s. When cGone with the Wind premiered in the theaters, the ticket price was a whopping $.23 per ticket.
Most Expensive Things in 1939
It’s easy to say the the 1930’s had it easy with “cheap” prices because it was almost a hundred years ago, but it’s important to consider the cost of these items compared with the average US salary of $1,368. The ratio of household income to a new car or home is far different than in today’s world.
According to The Street in 2019, the average household income was $48,600, while the average cost of a new car was $37,185 and average home cost was $315,000. Instead of a car being half your household income it’s closer to 76%. And today, it costs six and a half years of your salary to purchase a new home compared to 1939 when it cost four years worth of earnings. In the 1930’s, the large majority of purchased homes had one employed adult (mothers typically stayed home). Today, according to BLS.gov, among two parent homes, 63% have two parents drawing a salary.
Also see: mark-up pricing, marginal cost pricing