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That was back in 1995, and hedonic adjustmens are now included in CPI. Do note that COLA for Social Security is based off CPI. So the Boskin commission had a s

That was back in 1995, and hedonic adjustmens are now included in CPI. Do note that COLA for Social Security is based off CPI. So the Boskin commission had a significant conflict of interest as they looked for ways to keep CPI lower. Here's a much better explanation: http://www.ritholtz.com/blog/2010/01/economists-serving-their-political-masters/ http://www.ritholtz.com/blog/2010/01/economists-serving-thei...

yummyfajitas 16y ago
Your first source painted a compelling picture that (prior to 1995) hedonic adjustments were overstating inflation. Your second source does nothing but claim that Boskin was a political hack and blames him for cutting social security, and criticizes him for not believing Obama's "jobs created or saved" numbers. (It provides little evidence of anything, however.) I'm still waiting for you to provide evidence that hedonic adjustments are being deliberately manipulated.
- steveplace 16y ago
  They are not manipulated, and that's not what I've been trying to prove. Rather, hedonic adjustments are a distortion of what's actually going on with respect to inflation, and that's what I have a problem with. There's no vast conspiracy here, just some fancy accounting. I may be mistaken, but there's no transparency in what the gov't considers a hedonic adjustment, which leads to data accuracy problems as well. Hedonic adjustments basically say that a product price increase or decrease is weighted partially towards inflation and partially towards quality improvement and competition. But what happens is that economists will say perceived inflation is overstated because less money is needed to buy an iPod. That's a problem. Do note that this sort of adjustment is not a point of contention right now as we went through a recession, but back in 2007 when oil was skyrocketing and the price of milk was running, hedonic adjustments were used to understate actual inflation. Keep in mind, I'm not an expert in this stuff and if you need more evidence, the google should help you.

yummyfajitas 16y ago

Your first source painted a compelling picture that (prior to 1995) hedonic adjustments were overstating inflation. Your second source does nothing but claim that Boskin was a political hack and blames him for cutting social security, and criticizes him for not believing Obama's "jobs created or saved" numbers. (It provides little evidence of anything, however.) I'm still waiting for you to provide evidence that hedonic adjustments are being deliberately manipulated.

steveplace 16y ago
They are not manipulated, and that's not what I've been trying to prove. Rather, hedonic adjustments are a distortion of what's actually going on with respect to inflation, and that's what I have a problem with. There's no vast conspiracy here, just some fancy accounting. I may be mistaken, but there's no transparency in what the gov't considers a hedonic adjustment, which leads to data accuracy problems as well. Hedonic adjustments basically say that a product price increase or decrease is weighted partially towards inflation and partially towards quality improvement and competition. But what happens is that economists will say perceived inflation is overstated because less money is needed to buy an iPod. That's a problem. Do note that this sort of adjustment is not a point of contention right now as we went through a recession, but back in 2007 when oil was skyrocketing and the price of milk was running, hedonic adjustments were used to understate actual inflation. Keep in mind, I'm not an expert in this stuff and if you need more evidence, the google should help you.