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PaperclipPerfector  2mo ago (text post)   28439 thread views

Culture War Roundup for the week of March 11, 2024

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Hmm... Good question. You'd have to dig deeper into the data. My guess is that they can handle it in some cases, but not others.

The further you get away from "12 oz can of Campbell's soup" the more fuckery is possible. It truly is garbage in, garbage out. And I think, for the record, they are doing their best. It just gets so complicated so quickly.

https://www.bls.gov/opub/btn/volume-12/measuring-shrinkflation-and-its-impact-on-inflation.htm

For example, if a half-gallon (64 oz) of Brand A vanilla ice cream is priced in January 2021 at $5.99, then the effective price per ounce is $5.99 divided by 64 oz or $0.093 per ounce. If, in February 2021, the same Brand A vanilla ice cream is reduced in size to 60 oz, but the price is still $5.99, the effective price per ounce would be $0.0998 per ounce. This results in a 6.7-percent increase in the price per ounce of the ice cream, and the CPI would include this price increase.

Our economists even adjust for items that do not have a weight, like toilet paper. For example, when the number of sheets per toilet paper roll changes from 220 per roll to 200, the economist will adjust the data to show a 10-percent price-per-sheet increase.

Yeah, makes sense. I believe that the people making the numbers are doing their best and avoiding obvious failure modes. If the "family size" cereal shrinks from 64 oz to 48 oz, I'm sure they can handle that.

If the hotel stops making your room up every day, I doubt they factor that in.

If my accountant takes 5 days to respond to an email instead of 1 day, I know they aren't making hedonic adjustments.

The idea that things should stay the same price is inherently flawed anyways.

We are constantly making vast technological and logistical improvements to just about everything. We seem to assume that all price changes are caused by inflation or deflation when, in a properly functioning economy, everything but services should be steadily getting cheaper.

Of course. But nearly 80% of the economy is services.

Let's say the quality of my TV gets slightly better (4k to 8k) but I can't talk to my doctor on the phone anymore. Has my life gotten better or worse?

This is Baumol's cost disease in a nutshell. The things that can be improved have been improved and now we're left with services which depend on the average quality of the American worker - which is clearly decreasing in many sectors.

In some ways, we're a victim of our own success. The low hanging fruit has been picked.

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