Chained CPI = as long as there is a cheaper off-brand cat food, there is no inflation.

[ChrisBorg]

This is a transparent accounting lie. There is no inflation as long as the Govt. decides that another product of lesser value or quality can be substituted for the originally purchased item.

Tanguaray = Paramount

Cashmere = recycled cotton

beef = chicken (I am not making this example up. I have seen it used)

If you can replace beef with chicken then how far down the road is simply equating all food with calories?

[KamaAina]

1. Next week: chicken = Soylent Green

:scared:

[woolldog]

2. milk = soymilk

:rofl:

[KT2000]

3. OK - now I get it

when my cat food went from $1.29 to 1.59 it did not count.

[ChrisBorg]

4. Only if there was no possible cheaper substitute.

There is no inflation under this formula as long as the cheapest substitute doesn't cost as much as the original quality item. They save years waiting for this to happen.

[Fearless]

5. Everyone needed to lose weight right? n/t

[Mimosa]

6. Some of us have no room to cut.

I'm not yet old enough for Social Security and Medicare but I'm seriously scared. :(

[Still Waters]

10. +1--These out of touch millionaires in the House & Senate ought to walk a mile in our shoes

[truedelphi]

17. I have been scared so long, I am no longer scared.

Scared has become normal, I guess.

[kath]

7. self-delete

[unblock]

8. right, in its extreme form, it's a measure of spending, not inflation.

spend the same amount each month -- no matter what on -- and there's no "inflation".

who cares if what once bought lobster, caviar, and a bentley now buys catfood, salt, and a skateboard.

[chalky]

9. ketchup = vegetable?

I get it now.

[NorthCarolina]

12. LOL....good one.

:spray:

[pinqy]

11. Except that's not how it works at all

The government doesn't "decide" to substitute anything, and it's not based at all on comparative value.
Products are weighted by amounts purchased, and "substitution" is a changing of the weights based on changes in purchases. To simulate substitution the weights favor those products that change less. So substitution equally favors the more expensive product if that has a lower percentage price change.

[onenote]

16. +1

Although you're probably pissing into the wind trying to educate the howlers.

[robcon]

13. Nonsense. The "substitution effect" (Economics 101) is real and is seen every day.

n/t

[Fuddnik]

15. It's also called the "Hedonic Index).

It was put into the calculation for CPI to disguise inflation, and slow the rate of wages and SS increases.

[pinqy]

18. You're confusing hedonics and substitution

Hedonic regression is a technique to account for changes in quality in an item. Some quality change is straightforward: if a 6 oz can of tuna sells for $1.00 and then the price stays the same but the can size drops to 5oz, quality adjustments would record that as a 20% price increase even though the price for a "can" is still $1. It's trickier for other items, though...what's the value of the change if a 95/5 cotton/polyester blend shirt goes to 90/10? If the new model washing machine adds an extra rinse cycle? How do you adjust for the quality changes? It's not the same product, so you can't just use the nominal price as if it were the same. So hedonic regression is used to estimate a dollar value for the positive or negative change.

[robcon]

19. No, it was put in the CPI to make it more accurate.

n/t

[Fuddnik]

14. But, peas will still be peas, and we have to eat them.

Good thing I like peas.