Hacker News Reader

Comment by Balgair | Hacker News Reader

But then they would just have to make a list of each year's CPI basket and it's changes, and then have to calculate that going forward for forever.

Like, the differences in the 1991 basket to the 1992 basket are pretty small (please, someone, double check this). But the differences in the 1991 basket to the 2019 basket are larger, for example.

So it would seem to me to be a bit silly to have to update the prices of the 1991 basket all the way to today, especially when you're updating the 1992 basket as well, and every other year.

I'm not a CPI expert person, so if there is someone that really does understand these things in depth, please chime in!

View on HN

Furthermore, some of the items in the 1991 basket are no longer even available at any price. What's the price today for a new 25 inch analog CRT TV?

But that IS part of the problem. Obviously without looking back 12 years for a day to day practical result (but still looking that far for long term economics concerns.)

A "normal TV" now is a smart (spit) TV which compromises privacy and viewing experience and durability - but which is sold massively cheaper than a plain TV as defined perhaps 6 years ago. You have to dig hard to find a plain TV and it's more expensive. Do you count "smart" as a positive hedonic feature? Or do you count the effort necessary to find a plain TV in the price increase of a plain TV? Do you compensate for much other price increases just because a "normal TV" is now much less expensive and (allegedly) more hedonic?

Not at all, they could simply report the real cost difference in the basket as well as the adjusted cost. Every year we don't see a matrix of GDP compared to both the real and nominal GDP of all previous years. We see those two numbers compared to last year and it's left to basic mathematics to do longer term comparisons.

Part of the challenge is with how frequently they decide to change the basket of goods. If the basket was largely stable over time we would have a pretty good estimate simply by aggregating annual data, especially if they focus on staple consumables that don't change drastically over time.

And they could exactly do that. That's what computers are for.

Not even close. The BLS hires workers to collect price data from retailers on-site for their CPI computations.

The question was about offering multiple versions of the resulting statistics summary. Based on various starting dates, theories and such - something like output that could be explored or dialed including dialing which CPI method to use. That would explode the amount of reporting. It's not about data collection.

Making a list of each year's CPI basket would require price data collection for each year's basket.

Reply on news.ycombinator.com