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I would be suspicious of inflation adjusted prices, since they do not adequately account for deflation caused by technological development. For example in 2007

I would be suspicious of inflation adjusted prices, since they do not adequately account for deflation caused by technological development. For example in 2007 inflation adjusted dollars a round trip by steamer to Europe was $2000 dollars http://equator.eftours.com/2008/05/transatlantic-t.html http://equator.eftours.com/2008/05/transatlantic-t.html. I have flown to London, Madrid and Paris from Washington D.C. for prices ranging from $600 to $800 dollars. By comparison the trip cost 30% to 40% of the 1925 cost and took less than 10% of the time. Assuming that a dollar buys less over time is not quit accurate.

kingkongrevenge 18y ago
Hedonics are in fact used in inflation data. More likely abused. It's really quite a small number of technology heavy things that have shot up in quality in great excess over the price increases. And what about declines in quality? Vegetables have a fraction of the mineral content they did decades ago. Many food items have substituted artificial ingredients for relatively healthy natural ingredients. Many services at hotels and on airliners that were once complementary are now charged for. A great many houses built in the last ten years will have to be torn down in less than 20 years they were made so poorly. There are many examples of declining quality and these adjustments are never made.
- ewanmcteagle 18y ago
  Do you know any data sources for these things? I'm doubtful of the mineral content claim unless the fraction you mention is something like 9/10. Housing stock that is on average lasting for much less time is also suspicious to me. The biggest reconciliation issue is that we're much much wealthier and healthier than we were decades ago so I'm not sure there are broad meaningful declines in the quality of most things.
  - kingkongrevenge 18y ago
    You're confusing individual purchasing power with measures of inflation, which is about the value of money.
deleted 18y ago
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kingkongrevenge 18y ago

Hedonics are in fact used in inflation data. More likely abused. It's really quite a small number of technology heavy things that have shot up in quality in great excess over the price increases. And what about declines in quality? Vegetables have a fraction of the mineral content they did decades ago. Many food items have substituted artificial ingredients for relatively healthy natural ingredients. Many services at hotels and on airliners that were once complementary are now charged for. A great many houses built in the last ten years will have to be torn down in less than 20 years they were made so poorly. There are many examples of declining quality and these adjustments are never made.

ewanmcteagle 18y ago
Do you know any data sources for these things? I'm doubtful of the mineral content claim unless the fraction you mention is something like 9/10. Housing stock that is on average lasting for much less time is also suspicious to me. The biggest reconciliation issue is that we're much much wealthier and healthier than we were decades ago so I'm not sure there are broad meaningful declines in the quality of most things.
- kingkongrevenge 18y ago
  You're confusing individual purchasing power with measures of inflation, which is about the value of money.

deleted 18y ago

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