When people hear that a household washing machine cost $110 in 1911 but $338 in 1997 their inclination is to lament the good old days and comment on today's high cost of living. And in both instances they are thoroughly wrong.

First, they wouldn't consider using the good old days' machine, a clanking, chain-driven contraption that sometimes snared dresses and threatened to toss the lady of the house into the vat with the dirty clothes.Secondly, they are wrong about high costs: The 1997 machine might be priced higher, but it costs less - a lot less.

The confusion arises because of the measuring stick. Price is a poor yardstick, changing in buying power from one year to the next. A 1987 dollar bought less than a 1997 dollar. A 1997 dollar buys far more than the dollar spent in 1911.

In an effort to explain the price-cost issue, the Federal Reserve Bank of Dallas devoted its 1997 annual report to what it maintains is the declining real cost of living in America. And in doing so it has created a little classic of clarity.

Rather than using price, an elastic measure, authors W. Michael Cox and Richard Alm chose a fixed standard, the number of work hours needed in order to buy a product. Money prices, they explain, mean little apart from money wages. And wages have risen faster.

Using that definition, the $110 clothes washer of 1911 required 553 hours of work, based on the average hourly wage for production and nonsupervisory workers in manufacturing. A century ago, this figure was less than 15 cents an hour. By 1997 it was $13.18.

The disparity is even more pronounced when you add quality to the mix. The newer machines clean clothes more efficiently and quickly, are easier to use, and look and sound better. And the same applies to almost every product, many of them listed in the report.

In terms of time on the job, the cost of a half-gallon of milk fell from 39 minutes in 1919 to 16 minutes in 1950, then 10 minutes in 1975 and just 7 minutes last year. And a pound of ground beef descended from 30 minutes in 1911 to 6 minutes in 1997.

The money price of a 3-pound fryer chicken rose from $1.23 in 1919 to $3.15 in 1997, but its cost in work time fell from 2 hours, 37 minutes to just 14 minutes. And a dozen oranges cost 1 hour, 8 minutes of work time in 1919 but less than 10 minutes in 1997.

It goes that way for almost all items (a movie ticket still costs 19 minutes, same as in 1926, and a woman's haircut has risen from 27 minutes in 1920 to 46 minutes of work time in 1997) in the household budget, including the house and car.

New homes in 1920 cost 7.8 hours per square foot but 5.6 hours in 1996 (having risen one-half hour since 1970). But older houses may not have had garages, air conditioning or insulation. New cars - no comparison in quality - cost 4,696 hours in 1908 but 1,365 hours in 1997.

Cox and Alm found a regular pattern in their real-price comparisons. When a product comes onto the market, it is typically expensive, affordable for only society's wealthiest. But thereafter its price falls and the product spreads throughout the economy.

That's America's dynamic economy, and any real understanding of it cannot be obtained by price alone. If modern Americans had to work as hard as their forebears did for everyday products, say Cox and Alm, "they'd be in a continual state of sticker shock."

The report described in this story can be obtained at no cost from the Federal Reserve Bank of Dallas, 2200 N. Pearl St., Dallas, TX 75201, or by calling 1-214-922-5254, or via the Internet at (www.dallasfed.org).