Re:Do the Rich Capture All the Gains from Economic Growth?
by maxxxxx on Thursday October 25, 2018 @03:47PM
(#18303976)
I am not an expert but the way I have read about is that they also factor in better quality of items so even if your car costs 10000 more it's not counted as inflation because it's a better car compared to years ago and therefore has more value. I think the same is going on in health care and other areas. And excluding house prices is also a very questionable.
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Re:Do the Rich Capture All the Gains from Economic Growth?
by manofstick on Thursday October 25, 2018 @04:52PM
(#18304495)
Yes, it's Hedonic Quality Adjustment [1]. If you follow through the example on the link, you see the negative CPI component, even though a) you can't actually buy the old version anymore - so you can't reap the "real" price benefit and b) the subjective experience ultimately for lots of these things is the same. i.e. a mid-level TV from 40 years ago probably gave the same hedonistic pleasure as one today. Arguably the older one gave more because of less other gadgets!
[1] https://www.bls.gov/cpi/quality-adjustment/questions-and-ans...