Inflation measures aren’t stupid, they measure this too. If you sell a 15oz box for the same price you sold a 16oz box that will show up in the inflation numbers
For example, lets say a chocolate bar contains 80% chocolate and 20% food wax. A year later it contains 70% chocolate and 30% food wax. No inflation measure in the world accurately measures that. You can't measure for it because there's too many judgement calls if you do.
Also, there are goods/services whose quantities are not well measured. Another commenter wrote about his soccer league lowering the amount of pitch time a "session" takes while increasing the players - both diminishing his play time. That's not getting captured at all.
I think the bigger problem is that it's difficult to tell when this happens. There are judgment calls you need to make to adjust for this, but it's not an intractable problem. Official data sources have to make more subjective judgment calls than this constantly.
Grab a Hershey chocolate bar. How much chocolate is in there? Who knows?
For example, tracking bulk beef prices won't capture the labor costs of the would-be-butcher COSTCO can't hire.
Actually that might be a good heuristic, I don't remember the last time I bought food that even has ads. The store itself does have some ads that feature some of the items, I guess.
Is there any evidence that this happens often enough to affect CPI?
btw in the few cases where I've seen the concentration of tasty ingredients go down, it was clearly done so they could advertise the new version as "low-calorie" or "healthy". Consumers get what they demand.
The standard product was 70% coconut and 30% water, the "light" and "calorie reduced" version right next to it was literally just 50/50 coconut/water, at the same price.
Why yes, please sell me water at coconut prices! /s
Systematised evidence? No, but that's the complaint. It's a reasonable enough idea, so it's reasonable to expect a professional, funded body to do the accounting.
First of all CPI only tracks basic commodity goods like bread, milk, coffee, etc as a proxy for the basic cost of living. It doesn't track complex or premium products like frozen burritos.
It tracks the quantity of these products people actually buy and their cost per quantity, so reductions in the size of chocolate bars or amount of cereal in packets will not fool the CPI.
It does not take into account the quality of these products. If people start buying less premium coffee and more store brand coffee, or if manufacturers start putting less cocoa and more fat in chocolate this will not show up in the CPI.
The CPI is just one statistic, and should be considered alongside other measures such as consumer buying power and cost of living calculations.
I'm not an expert, so is my comment mostly correct? I only brought up CPI to illustrate an example of a widely purchased thing not being included in that particular metric. The rest of the comment, I think, was agnostic to the particular metric used. The point being that what the economic situation an individual or family faces is far more complex than any one metric and the people of a country can become less well off than the metrics reflect.
Consider seeking out European chocolate. There's no provisiion in the regulations for "wax", and fat not from cocoa-butter is restricted to 5%. And if it uses any non-cocoa fat, that has to be stated on the label, thus: 'contains vegetable fats in addition to cocoa butter'.
The 5% allowance was introduced at the urging of the UK, in the face of opposition from countries like France, that don't allow non-cocoa fats at all. Brands like Cadbury (now US-owned) have long used non-cocoa fats (non-milk fats in milk chocolate), and risked being banned from calling the resulting product "chocolate".
It seems that importing Cadbury's chocolate from the UK to the US is a trademark infringement; the US (Hershey's) version of Cadbury's is lower quality. Lower than the UK product - and the UK product doesn't meet the highest EU standards.
I understand that many USAians actually prefer Hershey's to european-style chocolate; that's OK, I'm sure it's partly just what you're used to. But if you do buy imported european chocolate, the proportion of cocoa solids is at least 20%, and the proportion of non-cocoa fat is restricted to 5% - except in the case of milk chocolate, which can contain milk fat, in which case the product must be named "Family Milk Chocolate".
Perhaps one might call this tinkering with composition to save money "composition-flation"? No, I guess not, it doesn't exactly trip off the tongue.
Godiva (Belgian but owned by a Turkish company) is usually what I see people buy for gifts. It looks like they closed all the US stores this year.
Aldi and Trader Joe’s sell great European chocolate. I know the house brands are relabeled but I’m sure they sell other European brands.
I recently ran a dark chocolate tournament for my brother-in-law's birthday, and the two most expensive chocolate won exactly zero one-on-one contests.
I typically like to eat single estate chocolate. Not that there aren't good blends (I even honestly like Hershey's as a nostalgia thing, though its too cloyingly sweet and full of flavor dulling diary product) but the variety you can get from single estates is noticeable. You can explore lots of different variations within the kinds of flavors you enjoy, and weed out the flavor profiles you don't like as much. I prefer leather and tobacco flavors, my wife prefers fruity, brighter flavors. Lots and lots of small single estate chocolates to explore in both those areas, and even some of them with multiple chocolateers giving their own directions from the same raw chocolate.
And then in 2016, some of the mountains are removed. And/or made shorter.
Also not captured in inflation, though the press seemed to pick up on it (hint: toblerone)
Whether or not chocolate, in particular, is tracked more closely is not my point. My point is that quality, not just quantity, is very difficult to track. I could have said that lawnmowers' decks are getting thinner using the same steel, but that more removed for most people.
That's really weird ... because it's an investment, yes, but not for the renter paying the increasing price. I don't understand how they allow for that.
That being said I think there is also a measure called "asset inflation" that I think tries to measure things like the cost of investment goods where you'd find houses included. The idea being that inflation is a tide that rises all costs, including stocks. You can't really say the market or a security is doing well or not if the underlying unit of measure (the dollar) is being debased.
Hence my original point that housing costs are included through a heuristic. The point being that a survey asking "how much do you think you could rent your house for" is really un-scientific. If I'm not participating in the market, there is no market, and the price is a guess.
Is that guess good within an order of magnitude? Sure. Is it good within 5%? No.
Here's one that got me recently. The El Monterey frozen burrito, Steak & 3-Cheese version. It used to be just steak and cheese as the filling. And some chilies. https://i.imgur.com/os3RK8y.png
They swapped that out for one with rice included. It tastes worse, has less protein, almost certainly less cheese, but still sells for the same price. https://i.imgur.com/hgGTNVI.png
No mention on their website of this at all. If it were an improvement, I'd expect the marketing department to tout it. But it's not. Instead of raising the frozen burrito price from $1 to $1.19 or whatever, they replaced expensive ingredients with rice.
It's still the same SKU, weighs the same, and sells for the same price. I'm sure the CPI impact is 0.
As Goodhart's Law says, “When a measure becomes a target, it ceases to be a good measure.” Note: we do this with all kinds of statistics, just look at police reporting on felonies. Too many? Just charge misdemeanors for the least violent crimes and all of a sudden you have reduced violent felonies by 20% in just one year!!!!
We've been having inflation for years but we just don't measure it in a way to see it. Take average household spend on healthcare, education, housing, food in 2010 and in 2020 and there will it is pretty hard to argue inflation wasn't already here. Now, we've dumped trillions to prop up the markets and inflation is starting to "officially" appear despite the new calculations. What's worse, is that the trillions aren't even being used to increase GDP or build infrastructure for future growth. It is only gone to create even bigger asset bubbles in housing and equities. I don't think the Fed can unroll this money and actually I think they have decided that they won't even bother to try. We are living in a monetary experiment and we'll find out in the next few years if MMT can really save us or not.
The only people who think that inflation is higher than the official statistics don't know the impact of inflation. Most of the time inflation is reality giving you a punch in the face. If inflation really happened between 2010 and 2020 where is the punch? If anything I feel we spent that time running away from reality and no, the problem isn't whatever the central bank is doing because it is acting as the last line of defense. Most of the time it is responding to political failures, which is why central banks are independent in the first place. If the central bank were democratized it would be unable to perform its function as people will abuse it to refuse reality even more. Just read up on what Erdogan did.
Housing
Health care
College
Decreased quality of goods (aka, fake stuff on Amazon)