What the hedonic adjustment ignores the fact that many of the things people need to live are bought for utility, now how many added features they might have. T

What the hedonic adjustment ignores the fact that many of the things people need to live are bought for utility, now how many added features they might have. Take toilet paper as an example, since most Americans find this a necessary object for if utility. Lets say the cheapest roll of toilet paper has 100 sheets cost $1. One day, the toilet paper company decides to reduce a roll to 90 sheets, but claims the new toilet paper is softer and of a better quality. The pointy heads at the FED may very well decide that increased quality and added softness of the sheets means that the new, smaller roll is of equal value to the older, larger roll. Through a hedonic adjustment, no inflation will be reflected to have occurred. But to the guy trying to wipe his ass, he is getting 10% fewer sheets for the same money. He is now going to have to buy 10% more toilet paper despite CPI reflecting no inflation in toilet paper prices. Now lets take a look at the cars, since they were cited in the article. CPI data has cars as unchanged. The author of the article shows how actual prices tracked hourly earnings. However, the author looks at average hourly earnings, which are skewed due to the vast majority of wage gains going to the top wage earner. So let's take a look at the median numbers. Using the example from the article, a Honda cost ~$12,000 in 1990 and ~$25,000 - more than 100% increase in real price. Median household income went from $59,966 in 1990 to $78,500 today, a rise of ~31% over the same period of time. The same Honda that cost ~1/6th of median household income costs ~1/3 of median household income 30 years later. The need for workers to get to their jobs (unfortunately for them) remains constant. Similar real price comparisons between the costs of things people actually need to survive (food, transportation, healthcare, insurance, education) and median wages will reveal similar discrepancies, so its not all too surprising that people hold official CPI numbers in such low regard. But at least TVs are cheaper.