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I should have been more specific. Certain rents are included, but house prices are not. Gasoline and bus fairs are included, but the cost of buying a car is not
by chrischattin 6y ago
I should have been more specific. Certain rents are included, but house prices are not. Gasoline and bus fairs are included, but the cost of buying a car is not. And, various food items are seasonally adjusted in a favorable manner.
Over time, the index has changed in a manner that grossly underestimates the inflation the average person experiences.
- megaman821 6y agoIf you did include houses and cars, how would you account for their general improvement over the years? My grandpa used to get rid of his vehicles as the approached $50k miles. They were just too unreliable and costly repairs were right around the corner. Today even junky cars can make it to $150k. They use less fuel, they have better comfort, and they can just do more in general with tech inside them. So if the value the car provides goes up 4x but it's price goes up 2x, what is its contribution to inflation?
- chrischattin 6y agoYour grandpa could buy a new car for $1500. More like price went up 20x. Incomes have not kept up with this even if you can argue that a new car today is 10x as "valuable" as one built in the 60's. And, the people making the call on those gray areas have an incentive to adjust reported inflation downward.