Evidence of inflation - just a bit of fun

[hoodoo]

Something kind of fun...

http://www.mouseprint.org/?p=114
http://www.mouseprint.org/?p=122

Out of curiosity, does the "basket of goods" for CPI calculation take these kinds of changes into account?

Cory

[metalman]

Re: Evidence of inflation - just a bit of fun

Something kind of fun...

http://www.mouseprint.org/?p=114
http://www.mouseprint.org/?p=122

Out of curiosity, does the "basket of goods" for CPI calculation take these kinds of changes into account?

Cory

i remember the 1970s inflation the candy bars got so friggin small you had to eat two of them... but the price only went up 25% vs the 50% they woulda if they kept them the same size. inflation shows up in more than higher prices. it's also...

- lousy customer service, as retailers cut back on service people to lower wage expenses
- fees for package delivery to cover higher energy costs
- shrinking products, as mentioned.

among others.

[bart]

Re: Evidence of inflation - just a bit of fun

Out of curiosity, does the "basket of goods" for CPI calculation take these kinds of changes into account?

Not that I'm aware of - the game of "hedonic" adjustment on the CPI only goes the other way... and I also have not positively confirmed this.

(edit/add - the hedonics entry on my glossary page has lots more data and a number of links with examples)

[jk]

Re: Evidence of inflation - just a bit of fun

re:
http://www.mouseprint.org/?p=114
the issue is global, and related to increased demand in the developing world, especially china. here is an email i sent to some friends in feb 05


Marc Faber has argued that the ongoing and future improvement in China's living standards will result in predictable changes in the utilization of natural resources: energy consumption most obviously but also things like coffee and cotton. They won't drink as much coffee as westerners in the near future, for example, but should increase consumption to something like that of Hong Kong or Taiwan. Anyway, I just came across the following example:

February 15 – UPI: “An official from the Shanghai Paper Trade Association said China’s consumption of wood pulp for toilet tissue was worrisome, China Daily reported… Wood pulp used to produce various kinds of paper has become China’s third largest import after petroleum and steel… The country consumed 8.2 million tons of wood pulp in 2004, of which slightly more than 6 million tons were imported. ‘While I am happy to see many young people adopt paper tissue for its convenience, a sign reflecting our social development and helping improve our industry to some extent, I am beginning to worry about our large wood consumption,’ Wang said.” [emphasis added]

[jk]

Re: Evidence of inflation - just a bit of fun

i remember the 1970s inflation the candy bars got so friggin small you had to eat two of them... but the price only went up 25% vs the 50% they woulda if they kept them the same size. inflation shows up in more than higher prices. it's also...

- lousy customer service, as retailers cut back on service people to lower wage expenses
- fees for package delivery to cover higher energy costs
- shrinking products, as mentioned.

among others.

the evolution of candy bars may also reflect broader changes in society. when i was a kid, 3 muskateers candy bars was advertised as "big enough for 3," and had 2 lines inscribed in the chocolate covering to indicate where to break it. when i was an older kid, the ads changed to "big enough to share," and there was only 1 line, down the middle. then the line disappeared entirely, and the slogan became "the big candy bar!" [for one]

[Finster]

Re: Evidence of inflation - just a bit of fun

Something kind of fun...

http://www.mouseprint.org/?p=114
http://www.mouseprint.org/?p=122

Out of curiosity, does the "basket of goods" for CPI calculation take these kinds of changes into account?

Cory

Heck if I know, Cory, but my guess is the BLS "hedonics" adjustments are a one-way street. Dollars to donuts that they make many more and larger adjustments for supposed improvements in quality than deteriorations.

Just a couple examples. Maybe some ambitious data geek (calling bart!) out there can verify/refute. Bet that GMO ag products like frankencorn and frankentomatoes are treated in inflation calculations as being identical to the real thing. Another one is that no downward "quality adjustment" is made for your having to spend 20% more time in heavier traffic commuting or the radically unimproved customer service pursuant to listening to time-wasting junk like "...if you want to straighten out our goof on your brglfnk ... press 5..." instead of talking to a real live human being.