Sunday, October 25, 2026

Between 1900 and 1990, real consumption of house furnishings and apparel grew by a factor of 114

See Cataloging Growth: A Re-Evaluation of 1900–1990 by Veonica Backer-Peral & Benjamin Wittenbrink. 

"Measuring real GDP growth requires distinguishing changes in prices from changes in product quality and composition, yet systematic quality adjustment of price indexes is unavailable for much of the twentieth century. We construct a new quality-adjusted price index for U.S. house furnishings and apparel goods using 5.1 million product listings from Sears catalogs, 1900–1990. We use large language models to extract product information and estimate hedonic price schedules with detailed product characteristics, allowing us to infer annual changes in the cost of living. The resulting cost-of-living index implies substantially lower goods inflation than conventional deflators, and consequently implies much faster real economic growth: between 1900 and 1990, real consumption of house furnishings and apparel grew by a factor of 114 using our index, compared with a factor of 24 using standard goods deflators. The gap between our index and canonical ones is largest before World War II and suggests that productivity growth peaked earlier in the twentieth century than conventional estimates indicate."

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