How to Compare Prices Across Time Periods — Inflation, FX, and Units
"A Seoul apartment cost 50M won in 1990 and 1B won now." Take that at face value and you'll misread it. The two figures aren't in the same unit. Inflation, FX, and qualitative differences (size, neighborhood, new vs. old build) have to be aligned before the comparison is fair.
Step 1 — inflation-adjust
Convert nominal to real first. Pick a base year and translate both amounts to that year's purchasing power.
Statistics Korea and the U.S. BLS publish CPI series. CPI composition differs across countries, so cross-country comparisons need extra care.
Step 2 — align units (currency)
Compare foreign-currency amounts at the exchange rate of their own moment. Converting a historical figure at today's rate usually distorts the past.
For long-run comparisons, remember that FX itself has drifted. USD/KRW in 1995 and in 2026 are different worlds.
Step 3 — match quality
A 1990 apartment and a 2026 apartment are not the "same" apartment. Insulation, parking, amenities, community facilities — all different. Ditto cars, phones, medical care. Price comparison only means something when the thing being compared is actually the same thing.
Step 4 — align tax/insurance scope
"Consumer price" covers different things in different countries. U.S. prices often exclude tax; European prices often include VAT. Salaries compared across pre-tax and post-tax will always confuse you.
Step 5 — add context
Relative to the average income of the era, comparisons become fairer.
"50M won in 1990 / urban household average income of the time"
"1B won in 2026 / current urban household average income"
The multiple of annual income gives a much more honest picture than the raw ratio.
Common mistakes
Using today's FX on a historical foreign-currency amount.
"It went up N-fold" without CPI adjustment — usually exaggerated.
Mixing pre-tax and post-tax figures, especially for salaries abroad.
Ignoring that the product has actually changed (common in any tech-touched category).
PriceGuess's Time Machine mode
Time Machine simulates a hypothetical investment from a past date to now. Fees, taxes, and dividend reinvestment are simplified. The point is to feel — intuitively — that past returns don't guarantee future ones.
※ Educational comparison guide. Does not guarantee any asset's performance.
