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Thank god TVs keep getting bigger so we can keep inflation down with hedonic adjustments.[0] [0][https://www.bls.gov/cpi/quality-adjustment/questions-and-answe
by nimos 5y ago
Thank god TVs keep getting bigger so we can keep inflation down with hedonic adjustments.[0]
[0][https://www.bls.gov/cpi/quality-adjustment/questions-and-answers.htm https://www.bls.gov/cpi/quality-adjustment/questions-and-ans...]
edit: Not that I love the AEI I think this is one of the most important pictures of the 21st century:
https://www.aei.org/wp-content/uploads/2019/01/cpichart2019.png?x91208 https://www.aei.org/wp-content/uploads/2019/01/cpichart2019....
- Thorrez 5y agoIs that graph saying cars stayed the exact same price in dollars even with 56% inflation? That doesn't make sense to me.
- nimos 5y agoYup. Welcome to the wild wild west of hedonic adjustment. Things like side impact airbags and rear view cameras basically give the BLS unlimited power to drive down inflation.
- standeven 5y agoI don't believe new or used vehicle purchases qualify for hedonic adjustments. https://www.bls.gov/cpi/quality-adjustment/home.htm https://www.bls.gov/cpi/quality-adjustment/home.htm
- nimos 5y agoCars fall under cost based adjustments. This is the most recent (AFAIK) document the BLS has published: https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf It's not entirely an unfair point in the sense clearly a modern car with modern safety and electronics costs more to produce (hence the cost basis). But as far as I know the BLS is basically given free reign to invent the cost basis.
- runeks 5y agoBear in mind that the chart covers a 20-year period. A 56% rise in prices over 20 years is 2.25% per year. Why doesn't it make sense to you that this particular basket of goods can rise in price, on average, 2.25% pear year while individual goods in the basket can either fall in price or rise much faster?
- Thorrez 5y agoThe reason I find that confusing is that cars keep getting new safety standards, emissions standards, fuel economy standards. Adding those new features isn't free. But somehow cars managed to decrease in price in inflation-adjusted dollars. Have there been significant technological advances that would allow car prices to decrease in inflation-adjusted dollars? Additionally, from my own point of view, it doesn't feel to me car prices dropped in inflation-adjusted dollars. This could be a mistaken feeling though. This graph seems to say cars increased in dollars pretty steadily from 2014 to 2021: https://wolfstreet.com/2021/05/27/the-whole-mindset-has-changed-consumers-are-willing-to-pay-a-lot-more-for-cars-and-trucks-generating-record-sales-gross-profits/ https://wolfstreet.com/2021/05/27/the-whole-mindset-has-chan... Maybe that's just people switching from sedans to SUVs though. That could also be responsible for my feeling of the inflation-adjusted price not changing, if I was looking at sedans in the past but SUVs now.
- garmaine 5y agoThey haven’t decreased in price. The feds instead say, essentially, “hybrid cars and airbags didn’t exist when this metric was invented, so to compare apples to apples we’ll guess at what a 1960’s car would cost if it were made today today” and then invents a number.
- rsj_hn 5y agoA better description of what they do is to make a list of the features that car Modern has and car Old doesn't. Say the airbag. Or anti-lock breaks. Then they look at how much it costs car Modern to add the airbag, using manufacturer's cost of producing that feature. Or how much it costs to have anti-lock breaks. Then they subtract that from the price of car Modern to try to get an apple to apple baseline of how much it would take to produce car Modern without the feature. Note that this process is not a hedonic adjustment, it's a production cost adjustment, which is what is used to deflate the price of cars.
- californical 5y agoThis was really interesting, thanks for the links!
- angelzen 5y agoGreat chart. The items with constant or decreasing prices are made overseas by people that cannot afford them. This is not a healthy balanced system.
- jeherr 5y agoEverything increasing in prices are mostly needs rather than wants too. Not that you don't need any of those thing decreasing in prices, but increasing is housing, healthcare, and education. Those are pretty fundamental needs.
- retube 5y agoHousing costs is interesting (no pun intended) - does that include mortgage costs? with interest rates at near record lows I'd have expected housing costs to have come down.
- OJFord 5y agoMortgage rates have quite a direct impact on house prices.
- hedberg10 5y agoThey are getting the size of walls now, so I'm ready to live out Fahrenheit 451.
- mattowen_uk 5y agoI would argue that most of the western world is already there. With mass media begin projected from every flat surface, less and less people are actually 'reading' (and I don't consider doom scrolling Facebook to be 'reading'), so we are one large ash pile away from the core message of the book.
- hedberg10 5y agoYou're right, it should have it's own name. It's much closer to drug use. Constantly context switching with high emotionality. "Dopamine streaming"? It takes a lot longer to put out an inflammatory book and it's harder to actually write one, because it has to be a whole book, not just 3 paragraphs. There was a lot less data easily accessible, meaning you had to have instincts of a seasoned craftsman or luck. The medium itself really did help us out for a long time.
- garmaine 5y agoInternet addiction has been a thing for a long time.