3 ms·

I agree. I may be being pedantic, but I think food prices are (or should be) the first and most important component of what we measure inflation with. It's muc

I agree. I may be being pedantic, but I think food prices are (or should be) the first and most important component of what we measure inflation with. It's much clearer to say "the rest of the basket hasn't risen above normal yet, but I am concerned the headline I quoted will mislead people who don't understand inflation.

EGreg 6y ago
You are making a lot of assumptions here. Chief among them is that the price of food must always be strongly tied to the prices of other things in the consumer price index. But clearly, that does not need to be the case. Especially after how unsustainably humans use farmland: https://amp.theguardian.com/environment/2015/dec/02/arable-land-soil-food-security-shortage https://amp.theguardian.com/environment/2015/dec/02/arable-l...
KptMarchewa 6y ago
Why? Food prices are usually few percent (6-18% in the western countries) of total household expenses. If you want to look at something that impacts people way more, look at rent or house prices.
- dwighttk 6y ago
  Pretty sure (couldn’t read most of the article, paywall) this is talking about worldwide though. (First word of the article is “Global”)
- sandworm101 6y ago
  >> Food prices are usually few percent (6-18% in the western countries) of total household expenses. Maybe for rich people. If you have an income of 2000/month, with the first 1000 or so going to rent, food is likely your second largest expense.
  - em500 6y ago
    Here are the most recent weights for official US CPI calculations: https://www.bls.gov/cpi/tables/relative-importance/2020.htm https://www.bls.gov/cpi/tables/relative-importance/2020.htm Housing is by far the largest component (42%) (contrary to the common misconception that housing is not in the CPI), followed by Food and Beverages (15%) and Transportation (15%). If you want to up-weight food, you must necessarily down-weight some other component. The prime candidate would be shelter (most other categories are already much smaller than food), but that's of course not the answer that CPI-doubters are looking for.
    - sandworm101 6y ago
      But the CPI targets a generic US consumer. I would argue that poor people have a different priority list than the rich. The US economy is increasingly polarized with a widening gap between rich and poor. I am curious as to whether the CPI targets the average person or the average consumer. Rich people spend more. They consumer more and are therefore overrepresented in most consumer-related measurements. Is the CPI meant as a measure of the cost of living or a tool for the calculation of available spending power?

EGreg 6y ago

You are making a lot of assumptions here. Chief among them is that the price of food must always be strongly tied to the prices of other things in the consumer price index. But clearly, that does not need to be the case. Especially after how unsustainably humans use farmland: https://amp.theguardian.com/environment/2015/dec/02/arable-land-soil-food-security-shortage https://amp.theguardian.com/environment/2015/dec/02/arable-l...

KptMarchewa 6y ago

Why? Food prices are usually few percent (6-18% in the western countries) of total household expenses. If you want to look at something that impacts people way more, look at rent or house prices.

dwighttk 6y ago
Pretty sure (couldn’t read most of the article, paywall) this is talking about worldwide though. (First word of the article is “Global”)
sandworm101 6y ago
>> Food prices are usually few percent (6-18% in the western countries) of total household expenses. Maybe for rich people. If you have an income of 2000/month, with the first 1000 or so going to rent, food is likely your second largest expense.
- em500 6y ago
  Here are the most recent weights for official US CPI calculations: https://www.bls.gov/cpi/tables/relative-importance/2020.htm https://www.bls.gov/cpi/tables/relative-importance/2020.htm Housing is by far the largest component (42%) (contrary to the common misconception that housing is not in the CPI), followed by Food and Beverages (15%) and Transportation (15%). If you want to up-weight food, you must necessarily down-weight some other component. The prime candidate would be shelter (most other categories are already much smaller than food), but that's of course not the answer that CPI-doubters are looking for.
  - sandworm101 6y ago
    But the CPI targets a generic US consumer. I would argue that poor people have a different priority list than the rich. The US economy is increasingly polarized with a widening gap between rich and poor. I am curious as to whether the CPI targets the average person or the average consumer. Rich people spend more. They consumer more and are therefore overrepresented in most consumer-related measurements. Is the CPI meant as a measure of the cost of living or a tool for the calculation of available spending power?