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But it's irrelevant when that's the cheapest new vehicle, most working Americans need a car, and despite better fuel efficiency, it isn't really that much cheap

But it's irrelevant when that's the cheapest new vehicle, most working Americans need a car, and despite better fuel efficiency, it isn't really that much cheaper to own a car. Hedonic adjustments make sense in theory, but in practice it's a loophole to make inflation whatever the government wants it to be. In the case of vehicles, they clearly went overboard. The counterargument to hedonic adjustments is that almost everything should become cheaper over time, including all vehicle parts and assembly, due to technological progress in manufacturing. I don't think it's unreasonable to assume hedonic adjustments should cancel out increases in manufacturing technology and just ignore them both, probably resulting in a simpler AND more accurate CPI.

RC_ITR 4y ago
> But it's irrelevant when that's the cheapest new vehicle, most working Americans need a car, and despite better fuel efficiency, it isn't really that much cheaper to own a car. Hedonic adjustments make sense in theory, bpractice it's a loophole to make inflation whatever the government wants it to be. The average new car in the US lasts like 2x longer than it did in 1998. Shouldn’t that factor in?
- symlinkk 4y ago
  No
- spaetzleesser 4y ago
  “The average new car in the US lasts like 2x longer than it did in 1998. Shouldn’t that factor in?” Absolutely not. Where do you stop with this game? Do you factor in that the seats are better so people go less to the doctor for back pain?
  - thfuran 4y ago
    Yes, that sounds like a good idea if what you're trying to estimate is the cost of maintaining a certain quality of life.
    - spaetzleesser 4y ago
      If you push this far enough then you can argue inflation away from almost anything.
      - thfuran 4y ago
        So what? The goal of measuring inflation isn't to compute the biggest, scariest number, it's to track changes over time.
  - RC_ITR 4y ago
    “I pay $30k for something I have to buy once every 10 years and that is ‘inflation’ vs. paying $20k for something I have to buy every 5 years” I mean, I really struggle to follow your logic. If a paper towel roll has 2x the sheets but costs 1.5x more, is that inflation too?
    - spaetzleesser 4y ago
      A lot of people buy a car every n years. For them it doesn’t matter if it lasts longer. How do you quantify how much longer cars last? Maybe people use them longer because cars are better or maybe they use them longer because they can’t afford new cars. The paper towel is a bad example because you clearly can quantify the number of sheets. It gets more tricky if you say new paper towels are more absorbent so you need less so there is no inflation although the sheet costs more. How do you measure that? These metrics are way too easy to be gamed. Next is apples costing twice as much but they are crunchier so no inflation?
      - RC_ITR 4y ago
        > A lot of people buy a car every n years. For them it doesn’t matter if it lasts longer. You can’t just keep randomly changing the relevant populations. First it was working people who can’t afford a breakdown. Now it’s wealthy people who choose to buy cars regularly. Maybe that’s why it’s difficult to grasp inflation: it’s a basket of everybody > How do you quantify how much longer cars last? https://ihsmarkit.com/research-analysis/average-age-of-vehicles-in-the-us-increases-to-122-years.html https://ihsmarkit.com/research-analysis/average-age-of-vehic... > Maybe people use them longer because cars are better or maybe they use them longer because they can’t afford new cars. You’re implying that people used to junk old cars because new ones were so cheap? Interesting take. > The paper towel is a bad example because you clearly can quantify the number of sheets I can also literally quantify how much longer cars last (see link above). > It gets more tricky if you say new paper towels are more absorbent so you need less so there is no inflation although the sheet costs more. Yeah, you know inflation takes a basket of spend into account, right? So yeah if in a year, the average consumer buys half as many paper towels that cost 2x as much that is exactly “no inflation”. > These metrics are way too easy to be gamed. Next is apples costing twice as much but they are crunchier so no inflation? I really suggest you read up more on the thinking behind inflation if you’re going to have such a strong opinion about it. Apples being crunchier is not accounted for in hedonic adjustments [0]. Like literally. Go to FK011 [0] https://www.bls.gov/cpi/quality-adjustment/home.htm https://www.bls.gov/cpi/quality-adjustment/home.htm EDIT: Learn something new I guess. Cars aren’t even subject to hedonic adjustment. They have their own adjustment system that seems pretty fair if you read it[1] [1] https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf

RC_ITR 4y ago

> But it's irrelevant when that's the cheapest new vehicle, most working Americans need a car, and despite better fuel efficiency, it isn't really that much cheaper to own a car. Hedonic adjustments make sense in theory, bpractice it's a loophole to make inflation whatever the government wants it to be. The average new car in the US lasts like 2x longer than it did in 1998. Shouldn’t that factor in?

symlinkk 4y ago
No
spaetzleesser 4y ago
“The average new car in the US lasts like 2x longer than it did in 1998. Shouldn’t that factor in?” Absolutely not. Where do you stop with this game? Do you factor in that the seats are better so people go less to the doctor for back pain?
- thfuran 4y ago
  Yes, that sounds like a good idea if what you're trying to estimate is the cost of maintaining a certain quality of life.
  - spaetzleesser 4y ago
    If you push this far enough then you can argue inflation away from almost anything.
    - thfuran 4y ago
      So what? The goal of measuring inflation isn't to compute the biggest, scariest number, it's to track changes over time.
- RC_ITR 4y ago
  “I pay $30k for something I have to buy once every 10 years and that is ‘inflation’ vs. paying $20k for something I have to buy every 5 years” I mean, I really struggle to follow your logic. If a paper towel roll has 2x the sheets but costs 1.5x more, is that inflation too?
  - spaetzleesser 4y ago
    A lot of people buy a car every n years. For them it doesn’t matter if it lasts longer. How do you quantify how much longer cars last? Maybe people use them longer because cars are better or maybe they use them longer because they can’t afford new cars. The paper towel is a bad example because you clearly can quantify the number of sheets. It gets more tricky if you say new paper towels are more absorbent so you need less so there is no inflation although the sheet costs more. How do you measure that? These metrics are way too easy to be gamed. Next is apples costing twice as much but they are crunchier so no inflation?
    - RC_ITR 4y ago
      > A lot of people buy a car every n years. For them it doesn’t matter if it lasts longer. You can’t just keep randomly changing the relevant populations. First it was working people who can’t afford a breakdown. Now it’s wealthy people who choose to buy cars regularly. Maybe that’s why it’s difficult to grasp inflation: it’s a basket of everybody > How do you quantify how much longer cars last? https://ihsmarkit.com/research-analysis/average-age-of-vehicles-in-the-us-increases-to-122-years.html https://ihsmarkit.com/research-analysis/average-age-of-vehic... > Maybe people use them longer because cars are better or maybe they use them longer because they can’t afford new cars. You’re implying that people used to junk old cars because new ones were so cheap? Interesting take. > The paper towel is a bad example because you clearly can quantify the number of sheets I can also literally quantify how much longer cars last (see link above). > It gets more tricky if you say new paper towels are more absorbent so you need less so there is no inflation although the sheet costs more. Yeah, you know inflation takes a basket of spend into account, right? So yeah if in a year, the average consumer buys half as many paper towels that cost 2x as much that is exactly “no inflation”. > These metrics are way too easy to be gamed. Next is apples costing twice as much but they are crunchier so no inflation? I really suggest you read up more on the thinking behind inflation if you’re going to have such a strong opinion about it. Apples being crunchier is not accounted for in hedonic adjustments [0]. Like literally. Go to FK011 [0] https://www.bls.gov/cpi/quality-adjustment/home.htm https://www.bls.gov/cpi/quality-adjustment/home.htm EDIT: Learn something new I guess. Cars aren’t even subject to hedonic adjustment. They have their own adjustment system that seems pretty fair if you read it[1] [1] https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf https://www.bls.gov/cpi/quality-adjustment/new-vehicles.pdf