3 ms·
The BLS and US CPI moved toward the current system for valid 'technical' reasons because the previous way was agreed upon to be bad: * https://www.bls.gov/opub
by throw0101b 3y ago
The BLS and US CPI moved toward the current system for valid 'technical' reasons because the previous way was agreed upon to be bad:
* https://www.bls.gov/opub/mlr/1982/06/art2full.pdf https://www.bls.gov/opub/mlr/1982/06/art2full.pdf
Further, there is no internationally agreed upon method for housing/shelter, with pros and cons for each:
> International statistical agencies have unanimously adopted the net acquisition approach for durables, but there is no consensus about the best approach to the treatment of OA in the CPI16 (Table 1). Rental equivalence is the most popular approach among countries belonging to the Organisation for Economic Co- operation and Development.17 Johnson’s (2015) recent review of the U.K. CPI proposes using CPIH, which includes the costs of OA and is based on a rental- equivalence approach, as the U.K.’s main measure of inflation. Several countries in the European Union have refrained from incorporating OA into their CPI, although Eurostat is currently conducting a pilot study for the euro area based on the net acquisition approach. Australia and New Zealand use a net acquisition approach, while Sweden and Finland—like Canada—are using a partial user-cost approach. No country has adopted a full-fledged user-cost approach.
* https://www.bankofcanada.ca/wp-content/uploads/2015/11/boc-review-autumn15-sabourin.pdf https://www.bankofcanada.ca/wp-content/uploads/2015/11/boc-r...
Seems like any particular system has pros and cons. Someplace else in this thread someone mentioned that Canada's system for Shelter is better, but even StatCan recognizes limitations of what they use:
* https://old.reddit.com/r/PersonalFinanceCanada/comments/z14pd1/we_are_data_experts_on_the_consumer_price_index/ix9es6a/ https://old.reddit.com/r/PersonalFinanceCanada/comments/z14p...
And plenty of folks in Canada think like you do: that the official way Is Wrong and Some Other way should be used—often pointing to the US as the way it should be done. And yet elsewhere in the thread someone in the US saying the Canadian way should be the way. ¯\_(ツ)_/¯
- bugglebeetle 3y agoYou’re completely missing my point: we already have firms who do what the BLS claims to be doing that have greater predictive power and determinative impact on what people play for housing. Ignoring that reality to shrug and go “lots of countries measure things in ways that don’t make any sense so what can you do” is not a refutation of anything.
- throw0101b 3y ago> You’re completely missing my point: we already have firms who do what the BLS claims to be doing that have greater predictive power and determinative impact on what people play for housing. I agree that what the BLS is doing is not predictive. Because that's not the point of the CPI: it's measuring what happened in the past. That's why the numbers that were released on October 12, 2023 were for what happened in September 2023, not November 2023.
- bugglebeetle 3y agoSee also determinative, which is what the BLS is trying to measure, i.e. what would be actually paid were the housing made available as a rental. No firm trying to calculate rents for a new rental would do what the BLS does, which is why their number are bullshit. If you can’t acknowledge this, it seems like you’re just being intentionally obtuse.