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If housing is excluded from CPI, why is it excluded? I'll agree that people make housing decisions infrequently, but it still seems like it should be reflected
by wyldfire 9y ago
If housing is excluded from CPI, why is it excluded? I'll agree that people make housing decisions infrequently, but it still seems like it should be reflected somehow with some weight into the index.
- occamrazor 9y agoBecause buying a house is considered an investment, not a cost. Other housing related costs (e.g. renovations, maintenance, etc.) are included in CPI.
- maxerickson 9y agoHousing isn't excluded from the CPI, it is one of the major components of the CPI. There's all sorts of information about how it is calculated on bls.gov.
- JamesBarney 9y agoBuying a house is excluded, but renting is included. This is because buying a house is an investment, and CPI is meant to track consumption.
- maxerickson 9y agoIt factors in the rental value of owner occupied housing, they attempt to exclude the investment value of the property and recognize the shelter value.