I would like to begin with the first time of which I'm sure that information passed along about Jesus as "oral tradition" is plainly incorrect. In Irenaeus' writing Against Heresies we have a tradition passed along that Jesus' ministry lasted over 10 years -- closer to 20 -- and that he died close to the age 50 (Against Heresies II:22). This is given on the basis of oral tradition. Irenaeus wrote about 150 years after the events in question. At this distance in time, the oral traditions available to Irenaeus about the events of Jesus' life are no longer reliable.
We should be careful to note that the passage of time alone is not the problem, nor is Irenaeus as an author. He also examines information from written sources with much sounder results. In the same section in which Irenaeus takes oral tradition for the untenable idea that Jesus' ministry lasted nearly 20 years until the age 50, he also reviews the written record from the Gospel of John and shows that Jesus' ministry did in fact last more than one year. From the text, he is able to show that Jesus' ministry probably spanned three or four years based on how many separate occasions Passover is recorded. However, Irenaeus is not yet to the point of acknowledging that the written material in his hand has now become more reliable than oral tradition of the events of 150 years in the past.
Shelf life or half-life?
Some of the material that I have reviewed suggests that the key question is not only how many years have passed, but also how many degrees of separation are involved. For example, I can reliably pass along information of things that happened 30 years ago; my mother can reliably pass along information of things that happened 50 or more years ago. My grandparents, who died just a few years ago, could still pass along reliable information of things that happened 70 years ago based on their own personal experience. The key then is not how many years have passed, at least not directly. The key is whether we're dealing with firsthand knowledge, second hand knowledge, third hand knowledge, or knowledge even further removed from the original memories.
From what I have seen and what I have read, I expect the pattern of reliability is comparable to half-life. "Half-life" describes the pattern of decay of radiation: over a certain amount of time, half the strength or potency of the material is gone, and when that length of time passes again, half again of what is left will be gone, and so on. This is a rough comparison that there is not a steady rate of decrease, but that the largest decrease in the quality of word-of-mouth information happens within the first few generations. During the first generation, word of mouth -- that is, hearing personally from someone with direct knowledge -- is the best available form of knowledge. As the generations pass, that kind of direct knowledge is simply no longer available by word of mouth. The more generations the word-of-mouth information is passed along, the less reliable it becomes unless there is some sort of safeguard for preserving it. Like a broadcast signal, the further removed we are from the source, the lower the quality of the signal. Each passing generation sees the loss of certain parts of the memory; unless recorded in permanent form, still more pieces of the memory will be lost with time.
When it comes to the reliability of the oral traditions about the life of Jesus, I am willing to trust first generation and second-generation information, but not information further removed from the source than that. In the case of Irenaeus' mistaken oral traditions, we see that at the time he wrote, the generation of those with firsthand and second-hand information had died decades previously.
I decided from two separate lines of argument -- both from my own family history and from a review of the quality of information passed along by oral tradition about Jesus' ministry during the second century -- that firsthand information was of course the best, but the retelling by someone who heard that firsthand account still contained much useful and reliable information. Anything beyond that -- anything three or more steps removed from the original event -- had too much fading to be useful or reliable at any practical level. Oral tradition may last longer in oral cultures, but to the best of my knowledge the majority of Church writers of the late 100's A.D. were not from oral cultures.
Interestingly, Eusebius records something similar in the History:
But when the sacred band of the apostles had in various ways reached the end of their life, and the generation of those privileged to listen with their own ears to the divine wisdom had passed on, then godless error began to take shape ... (History III.32)The apostles had the confidence and certainty of direct knowledge; their hearers in turn had direct knowledge of what the apostles had said. But when knowledge becomes more indirect than that, the quality of information degrades. We have then also Eusebius' observation that knowledge at two degrees of separation is still reasonably reliable, but that three degrees of separation is past the useful shelf life of oral tradition.
Some would note that there are cultures which have better methods of preserving oral traditions. This is likely enough, but not directly related to my current point since the Christian writers of the mid to late 100's A.D. do not seem to have been from such a culture. The point remains that in this case, the expiration date on oral tradition about Jesus comes with the dying out of the second generation of Christians, those who had themselves known people who had known Jesus. It would be interesting to see if living among a community of people who shared the same memories would help preserve the quality of those memories from fading. In the first generation, the best information is arguably the word of mouth information from those who knew directly. But as we turn from the second generation to the third generation after an event, the best information is preserved not by word-of-mouth, but in writing.