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If you want to know more about inflation I recommend reading Lyn Aldens recent post on it: https://www.lynalden.com/inflation/ https://www.lynalden.com/inflati

If you want to know more about inflation I recommend reading Lyn Aldens recent post on it: https://www.lynalden.com/inflation/ https://www.lynalden.com/inflation/ Inflation is a complicated subject and is not as exact a science as some believe. For instance see this adjustment based on increase in quality: "Let’s pick the Toyota Camry as a direct comparison to reduce the size/type changes. The starting MSRP for the automatic was $12,258 in 1990. The starting MSRP in 2020 was $24,425. That’s a 100% price increase, almost exactly. That’s about 2.5% per year. Certainly we can allow for a substantial amount of quality adjustment in the new car CPI calculation. The new Camry has power everything, a navigation system, better safety features, and better gas mileage. But is the quality/size adjustment enough to reduce the actual price appreciation from 100% down to just 22% on a quality-adjusted basis during this three-decade period, as official new car CPI says was the case?"

frankbreetz 5y ago
With cars, I think it is important to factor in how long it lasts. If a car lasts twice as long shouldn't it have half as much impact on CPI? I don't think that makes it too much of a stretch.
rhinoceraptor 5y ago
The quality argument is a bit irrelevant because a 1990 Camry would be illegal to sell if it were made today. Obviously it's a good thing that safety, efficiency and emissions standards are going up, but those things aren't free.
- jfoutz 5y ago
  I can only recall 3 forced upgrades, passive passenger restraints, which turned out to be airbags. Minimum MPG, across all cars sold (SUVs could be worse as long as other models improved). and crash survival, which turned out to be crumple zones. I wouldn't say irrelevant, but maybe "weak signal". I agree wholeheartedly that there are other aspects (like those regulations) that were not free. But a bunch of other stuff came along that was probably about the same price. Better paint. Plastic bits more resistant to being out in the sun. Navigation. I would claim, Corolla targeted the same market. Inexpensive sedan, probably a family's first car, and you could plan on that car being one of the kids' first car. So it probably targeted the same proportion of budget. On the other hand, the size of that market wasn't constant. There are a zillion confounding factors. I thought a little about gas itself, which I don't recall much regulation change around (but I might be forgetting) but I'd think gas in 1990 is about the same as gas in 2021. Seems like it was about 90 cents? just about 3 dollars now? (hand wavy numbers). Of course there was a war in the interim, and oil shale became feasible for a while. So that has its own confounding factors. Everything is changing all the time. Inflation seems like a thing, but it kinda feels like using epicycles to describe movements of the stars. It kinda works, but there is more going on in underlying system. I'm far from an expert, hell, this is mostly me relying on my selective memory. It feels like stuff is more expensive. but younger me might have had more energy and lower standards. I dunno. I guess this comment is just armchair observations. I think there is something going on, but it's a really complicated system, and I'm not Kepler.
  - throwaway0a5e 5y ago
    >I can only recall 3 forced upgrades, passive passenger restraints, which turned out to be airbags. Minimum MPG, across all cars sold (SUVs could be worse as long as other models improved). and crash survival, which turned out to be crumple zones. This is a bad way to frame it. All of those things have dozens to hundreds of downstream effects on the rest of the system. Large components (say nothing of sub assemblies) of a 1990 car could not be used in any practical way to build a road legal 2021 car (without comically inefficient workarounds) because the design revisions needed for modern regulatory compliance between then and now are so extensive. Heck, the physical dimensions of a typical 1990 car probably preclude compliance with current pedestrian safety requirements. There were also dozens of minor revisions to the regulatory standards cars must meet in that time (headlight performance, noise emissions, etc).
    - dghlsakjg 5y ago
      FYI, In North America there aren't pedestrian safety standards from the NHTSA.
  - lostapathy 5y ago
    Maybe illegal is too strong of a word, but in practice "the market" demands much safer cars than it did 3 decades ago, and that costs money. If you build cheaper cars but nobody can insure them economically, for example, you're not gonna get a lot of takers.
- imtringued 5y ago
  You can buy used cars and keep maintaining them. The car I bought is so cheap it barely even makes financial sense to repair it after 10 years, it's financially better to get the latest model once they hit the used car market.

frankbreetz 5y ago

With cars, I think it is important to factor in how long it lasts. If a car lasts twice as long shouldn't it have half as much impact on CPI? I don't think that makes it too much of a stretch.

rhinoceraptor 5y ago

The quality argument is a bit irrelevant because a 1990 Camry would be illegal to sell if it were made today. Obviously it's a good thing that safety, efficiency and emissions standards are going up, but those things aren't free.

jfoutz 5y ago
I can only recall 3 forced upgrades, passive passenger restraints, which turned out to be airbags. Minimum MPG, across all cars sold (SUVs could be worse as long as other models improved). and crash survival, which turned out to be crumple zones. I wouldn't say irrelevant, but maybe "weak signal". I agree wholeheartedly that there are other aspects (like those regulations) that were not free. But a bunch of other stuff came along that was probably about the same price. Better paint. Plastic bits more resistant to being out in the sun. Navigation. I would claim, Corolla targeted the same market. Inexpensive sedan, probably a family's first car, and you could plan on that car being one of the kids' first car. So it probably targeted the same proportion of budget. On the other hand, the size of that market wasn't constant. There are a zillion confounding factors. I thought a little about gas itself, which I don't recall much regulation change around (but I might be forgetting) but I'd think gas in 1990 is about the same as gas in 2021. Seems like it was about 90 cents? just about 3 dollars now? (hand wavy numbers). Of course there was a war in the interim, and oil shale became feasible for a while. So that has its own confounding factors. Everything is changing all the time. Inflation seems like a thing, but it kinda feels like using epicycles to describe movements of the stars. It kinda works, but there is more going on in underlying system. I'm far from an expert, hell, this is mostly me relying on my selective memory. It feels like stuff is more expensive. but younger me might have had more energy and lower standards. I dunno. I guess this comment is just armchair observations. I think there is something going on, but it's a really complicated system, and I'm not Kepler.
- throwaway0a5e 5y ago
  >I can only recall 3 forced upgrades, passive passenger restraints, which turned out to be airbags. Minimum MPG, across all cars sold (SUVs could be worse as long as other models improved). and crash survival, which turned out to be crumple zones. This is a bad way to frame it. All of those things have dozens to hundreds of downstream effects on the rest of the system. Large components (say nothing of sub assemblies) of a 1990 car could not be used in any practical way to build a road legal 2021 car (without comically inefficient workarounds) because the design revisions needed for modern regulatory compliance between then and now are so extensive. Heck, the physical dimensions of a typical 1990 car probably preclude compliance with current pedestrian safety requirements. There were also dozens of minor revisions to the regulatory standards cars must meet in that time (headlight performance, noise emissions, etc).
  - dghlsakjg 5y ago
    FYI, In North America there aren't pedestrian safety standards from the NHTSA.
- lostapathy 5y ago
  Maybe illegal is too strong of a word, but in practice "the market" demands much safer cars than it did 3 decades ago, and that costs money. If you build cheaper cars but nobody can insure them economically, for example, you're not gonna get a lot of takers.
imtringued 5y ago
You can buy used cars and keep maintaining them. The car I bought is so cheap it barely even makes financial sense to repair it after 10 years, it's financially better to get the latest model once they hit the used car market.