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Are you saying that inflation is unevenly distributed across the "quality" spectrum of products? Yes, this has been studied. Perhaps it deserves more research,

by xapata 8y ago

Are you saying that inflation is unevenly distributed across the "quality" spectrum of products? Yes, this has been studied. Perhaps it deserves more research, but the results I remember demonstrated that price inflation rates are higher among more expensive products. One might hypothesize that greater wage inflation and other income gains among wealthier people is causing the corresponding higher inflation for the products they buy. When home-values inflate, it's a wealth transfer from first-time buyers to retirees that are downsizing, selling a large home for a smaller one, putting the profits into stocks and bonds. To your point, that's not a net loss, just a wealth transfer. Note, it's not a net gain either. Building homes is a gain (usually), inflating asset prices are not. As for the rising rent, that's part of inflation ... Anyway, you seem distressed that things are "really tough to represent in the statistics" but I assure you many of your concerns have been considered.

vanderZwan 8y ago
> Are you saying that inflation is unevenly distributed across the "quality" spectrum of products? Yes, this has been studied. Perhaps it deserves more research, but the results I remember demonstrated that price inflation rates are higher among more expensive products. Doesn't technological progress complicate this question even further? When I think of more expensive products, I think of computers, smartphones, etc. Yes, the new flagship products stay expensive, but that also represents new possibilities that weren't possible a decade ago (let alone a few decades ago). But nowadays you can get a functioning computer that lets you browse the Internet, watch videos and do your emails for the price of a Raspberry Pi (and the investment of a separate keyboard, mouse, charger, SD card and TV - but those can be gotten for cheap as well). Similarly, a lot of things that used to be expensive are now cheap. So basically: technological progress is shifting the "quality" spectrum itself, in some cases very quickly, in some cases barely. (I'm not saying you're wrong, I'm just curious how economists deal with questions like this)
- xapata 8y ago
  Computing is the extreme example of this phenomenon. Economists don't in general have a great way to handle this issue, because it varies so greatly across industries. A loaf of bread is just about the same as it's always been. Oh wait, maybe wonderbread is worse and artisinal ciabatta is better? Sometimes economists like to create some aggregate measure of increasing consumer choice by counting the number of SKUs available in a store. Big box stores pushing out Mom & Pop made that awkward. Now Amazon makes it tougher still. Back in grad school, I was not aware of any consensus on the topic. I haven't kept up with it since. One technique is to focus your research on products that are largely stable in quality. For example, wine glasses. Not plastic ones, but glass or crystal. They've got a fairly large distribution in "quality" or at least in price and yet had a fairly stable range of quality since the 1950s.
  - vanderZwan 8y ago
    Thank you for answering. Sounds like a wicked problem.

by xapata 8y ago

vanderZwan 8y ago

> Are you saying that inflation is unevenly distributed across the "quality" spectrum of products? Yes, this has been studied. Perhaps it deserves more research, but the results I remember demonstrated that price inflation rates are higher among more expensive products. Doesn't technological progress complicate this question even further? When I think of more expensive products, I think of computers, smartphones, etc. Yes, the new flagship products stay expensive, but that also represents new possibilities that weren't possible a decade ago (let alone a few decades ago). But nowadays you can get a functioning computer that lets you browse the Internet, watch videos and do your emails for the price of a Raspberry Pi (and the investment of a separate keyboard, mouse, charger, SD card and TV - but those can be gotten for cheap as well). Similarly, a lot of things that used to be expensive are now cheap. So basically: technological progress is shifting the "quality" spectrum itself, in some cases very quickly, in some cases barely. (I'm not saying you're wrong, I'm just curious how economists deal with questions like this)

xapata 8y ago
Computing is the extreme example of this phenomenon. Economists don't in general have a great way to handle this issue, because it varies so greatly across industries. A loaf of bread is just about the same as it's always been. Oh wait, maybe wonderbread is worse and artisinal ciabatta is better? Sometimes economists like to create some aggregate measure of increasing consumer choice by counting the number of SKUs available in a store. Big box stores pushing out Mom & Pop made that awkward. Now Amazon makes it tougher still. Back in grad school, I was not aware of any consensus on the topic. I haven't kept up with it since. One technique is to focus your research on products that are largely stable in quality. For example, wine glasses. Not plastic ones, but glass or crystal. They've got a fairly large distribution in "quality" or at least in price and yet had a fairly stable range of quality since the 1950s.
- vanderZwan 8y ago
  Thank you for answering. Sounds like a wicked problem.