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Whatever you think of the validity of "hedonic adjustments" doesn't really matter as far as cars are concerned because the BLS doesn't apply hedonic adjustments

Whatever you think of the validity of "hedonic adjustments" doesn't really matter as far as cars are concerned because the BLS doesn't apply hedonic adjustments to car prices.

MontyCarloHall 5y ago
Yes they do: https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf
- gruez 5y ago
  that says quality adjustments, not hedonic adjustments.
  - MontyCarloHall 5y ago
    Aren’t “quality adjustments” by definition “hedonic adjustments”? How are these not hedonic adjustments? From the linked PDF: “BLS adjusts for structural and engineering quality changes such as: • Changes that affect the safety of occupants of the vehicle as mandated by legislated federal or state standards, and for purposes of IPP export items, applicable foreign market standards. Changes in safety features not required by legislated standards will be evaluated on a case-by-case basis. • Changes in mechanical or electrical features that affect the overall operation or efficiency of the vehicle, or the ability of a component to perform its function, such as changes affecting steering, braking, stability, engine horsepower, traction control, transmission, battery life, and fuel systems and/or electrical systems. • Changes in design or materials that affect the length of service, durability, need for repairs, or strength or performance of the item, such as stronger bumpers, HID headlamps, flexible body panels, platinum-tipped spark plugs, or warranty changes. • Changes that affect comfort or convenience, if supported by evidence of a functional or software improvement, such as redesigned seat belts, remote door locks, theft deterrent systems, navigation and communication systems, satellite radio hardware, drive assist systems, backup cameras, sensors or changes in storage capacity.”
    - floxy 5y ago
      The U.S. BLS differentiates between "hedonic" and other quality adjustments: https://www.bls.gov/cpi/quality-adjustment/questions-and-answers.htm https://www.bls.gov/cpi/quality-adjustment/questions-and-ans... 3. What items in the CPI are hedonically adjusted? The CPI uses hedonic quality adjustments in item categories that tend to experience a high degree of quality change either due to seasonal changes, as in apparel items, or because of innovative improvements and technological changes, as in consumer appliances and electronics. New and used car purchases (TA011 and TA021) use "Cost based adjustments" https://www.bls.gov/cpi/quality-adjustment/home.htm https://www.bls.gov/cpi/quality-adjustment/home.htm
      - MontyCarloHall 5y ago
        What is the difference in methodology between “hedonic” and “cost based” adjustments? The site doesn’t say. For all intents and purposes (i.e. going by the Wikipedia/intro to macroeconomics definition), any form of accounting for changing quality of goods in inflation indices is a “hedonic adjustment.” The BLS distinguishing between “hedonic adjustments” and “cost based adjustments” (the latter of which they do not define) seems to be something specific to them. And the PDF actually describing their methodology for adjusting car prices sure reads like textbook hedonic adjustment to me.
        floxy 5y ago
        Yep, sorry I don't have more information.

Whatever you think of the validity of "hedonic adjustments" doesn't really matter as far as cars are concerned because the BLS doesn't apply hedonic adjustments to car prices.

MontyCarloHall 5y ago

Yes they do: https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf

gruez 5y ago
that says quality adjustments, not hedonic adjustments.
- MontyCarloHall 5y ago
  Aren’t “quality adjustments” by definition “hedonic adjustments”? How are these not hedonic adjustments? From the linked PDF: “BLS adjusts for structural and engineering quality changes such as: • Changes that affect the safety of occupants of the vehicle as mandated by legislated federal or state standards, and for purposes of IPP export items, applicable foreign market standards. Changes in safety features not required by legislated standards will be evaluated on a case-by-case basis. • Changes in mechanical or electrical features that affect the overall operation or efficiency of the vehicle, or the ability of a component to perform its function, such as changes affecting steering, braking, stability, engine horsepower, traction control, transmission, battery life, and fuel systems and/or electrical systems. • Changes in design or materials that affect the length of service, durability, need for repairs, or strength or performance of the item, such as stronger bumpers, HID headlamps, flexible body panels, platinum-tipped spark plugs, or warranty changes. • Changes that affect comfort or convenience, if supported by evidence of a functional or software improvement, such as redesigned seat belts, remote door locks, theft deterrent systems, navigation and communication systems, satellite radio hardware, drive assist systems, backup cameras, sensors or changes in storage capacity.”
  - floxy 5y ago
    The U.S. BLS differentiates between "hedonic" and other quality adjustments: https://www.bls.gov/cpi/quality-adjustment/questions-and-answers.htm https://www.bls.gov/cpi/quality-adjustment/questions-and-ans... 3. What items in the CPI are hedonically adjusted? The CPI uses hedonic quality adjustments in item categories that tend to experience a high degree of quality change either due to seasonal changes, as in apparel items, or because of innovative improvements and technological changes, as in consumer appliances and electronics. New and used car purchases (TA011 and TA021) use "Cost based adjustments" https://www.bls.gov/cpi/quality-adjustment/home.htm https://www.bls.gov/cpi/quality-adjustment/home.htm
    - MontyCarloHall 5y ago
      What is the difference in methodology between “hedonic” and “cost based” adjustments? The site doesn’t say. For all intents and purposes (i.e. going by the Wikipedia/intro to macroeconomics definition), any form of accounting for changing quality of goods in inflation indices is a “hedonic adjustment.” The BLS distinguishing between “hedonic adjustments” and “cost based adjustments” (the latter of which they do not define) seems to be something specific to them. And the PDF actually describing their methodology for adjusting car prices sure reads like textbook hedonic adjustment to me.
      - floxy 5y ago
        Yep, sorry I don't have more information.