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> Any economics or statistics student could do be a better job. And certainly, no statistician worth their salt would compute anything with the methodology that

> Any economics or statistics student could do be a better job. And certainly, no statistician worth their salt would compute anything with the methodology that BLS uses. So every bond trader, Fed observer, academic economist, investment bank economist, pension fund, union, etc, are all aware of this bad methodology in the BLS CPI, and are saying nothing? All these people with heaps of money on the line in one of the most looked-at statistics published are… ignoring the problem? > Hardly anyone knows how these numbers are computed. Hardly anyone cares that they are unscientific trash. Pretty much everyone stops at the title associated with the number. Really? Because MIT's Billion Prices Project (BPP; an index of internet prices, scraped daily) found the CPI and the BPP are very tightly intertwined: * http://bpp.mit.edu/usa/ http://bpp.mit.edu/usa/ * https://en.wikipedia.org/wiki/MIT_Billion_Prices_project https://en.wikipedia.org/wiki/MIT_Billion_Prices_project

light_hue_1 3y ago
> So every bond trader, Fed observer, academic economist, investment bank economist, pension fund, union, etc, are all aware of this bad methodology in the BLS CPI, and are saying nothing? All these people with heaps of money on the line in one of the most looked-at statistics published are… ignoring the problem? No, they make money off the problem by computing better numbers internally. And there are countless papers out there criticizing the BLS for their shoddy methodology. > Really? Because MIT's Billion Prices Project (BPP; an index of internet prices, scraped daily) found the CPI and the BPP are very tightly intertwined: Funny someone else brought that up. That's "true" as long as you don't look at any of the details and don't read their publications. They don't measure housing for one thing, and that's what we were talking about here. Only goods. They even show that services aren't well estimated at all. And even some categories of goods aren't. And they unfortunately ran at a time of historically low inflation. It's much easier to predict a number that is very low and has very small range. So.. the MIT project is about the wrong category of goods. Computed in a totally different way by the BLS. Nothing in my post applies to it. And they explicitly show that they don't agree with CPI on categories like it (simply because their project isn't relevant to them).

light_hue_1 3y ago

> So every bond trader, Fed observer, academic economist, investment bank economist, pension fund, union, etc, are all aware of this bad methodology in the BLS CPI, and are saying nothing? All these people with heaps of money on the line in one of the most looked-at statistics published are… ignoring the problem? No, they make money off the problem by computing better numbers internally. And there are countless papers out there criticizing the BLS for their shoddy methodology. > Really? Because MIT's Billion Prices Project (BPP; an index of internet prices, scraped daily) found the CPI and the BPP are very tightly intertwined: Funny someone else brought that up. That's "true" as long as you don't look at any of the details and don't read their publications. They don't measure housing for one thing, and that's what we were talking about here. Only goods. They even show that services aren't well estimated at all. And even some categories of goods aren't. And they unfortunately ran at a time of historically low inflation. It's much easier to predict a number that is very low and has very small range. So.. the MIT project is about the wrong category of goods. Computed in a totally different way by the BLS. Nothing in my post applies to it. And they explicitly show that they don't agree with CPI on categories like it (simply because their project isn't relevant to them).