3 ms·
> but I definitely don't think it's due to someone actively deciding to fudge the figures. What they've done instead is change the CPI formula a couple times t
by m52go 10y ago
> but I definitely don't think it's due to someone actively deciding to fudge the figures.
What they've done instead is change the CPI formula a couple times to avoid it from reflecting price increases.
For example, they replaced steak with hamburger a few years ago when steak got too expensive.
- hga 10y agoThere's some legitimacy to the substitution approach, because people do e.g. switch from hamburger to chicken when the former gets more expensive (steak, if it was substituted by hamburger, is fraud), and at least this is a special case of production issues vs. something driven by "secular" inflation (drought really wacked cattle production, as my father's friends who raised them attested at the time). But it's easy to take too far, and any consumer who nonetheless insist on having some steaks, or more expensive hamburger, you'll not be impressed by this statistical substitution trick.
- smallnamespace 10y agoYou can't calculate inflation over the long run without changing the components of the basket, and it goes both ways: http://www.bls.gov/opub/mlr/2014/article/one-hundred-years-of-price-change-the-consumer-price-index-and-the-american-inflation-experience.htm http://www.bls.gov/opub/mlr/2014/article/one-hundred-years-o... For example, the average household no longer purchases coal or firewood to heat their home, and we no longer buy straw hats. That seems completely reasonable to me. People's preferences change. On the other hand, we've added radios, TVs, cars, etc. to the basket.