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I CH. 8 COMPARISONS OF PURCHASING POWER 101

two places. The friend thinks in his mind’s eye off a pair of persons, one in each of the places, who

■ seem to him to be enjoying roughly the same general

| standard of life, compares their money-incomes, and

| makes his answer on the basis of this comparison. He

I may tell him that he will have to get £1200 a year

1 ~ to be as well off in New York as with £700 a year

in London or £500 a year in Edinburgh. That is tosay, the purchasing powers of money for this income-range come out in the proportions 12 to 7 to 5 ; fora working man the ratio would not be necessarily thesame.

The same method is used to compare purchasingpower at different dates, where the judgments ofmemory are available. We often ask how purchasingI power for a given class compares now with what it was

before the war, and decide on the basis of our generalmemories of comparative well-being what the ratio: is for the middle-class or the agricultural labourer, and

so forth.

, If comparisons of this kind were to be made on the

I basis of inquiries expressly carried out for the purpose

j by trained inquirers and checked by statistics of prices

l and consumption, they might be very valuable indeed.

But there are two sets of circumstances in which evencomparisons, having the inevitable vagueness and in-accuracy of mere memory and general impression,may still give a better answer than we get from index-numbers—namely, those where the character of ex-penditure has greatly changed, and those where asubstantial proportion of the expenditure is of the non-standardised sort which an index cannot cover.

For example, the comparison between the purchas-i ing power of money for an Englishman here and in the

j East may be better made by general impression of

the costs of equivalent standards of life than in\ any other way, since the things on which a man

: spends his money are so different in the two cases.