I think the way they determine the CPI is that if the measured inflation rate is low but large numbers of people complain about inflation, they'll adjust the numbers upward. Or maybe that's too cynical....
Not all price indices have fixed weights. The value of the GDP consumption deflator varies with the mix of purchases people make. They want to make the CPI more like that. On Tue, Aug 13, 2013 at 11:55 AM, michael perelman < [email protected]> wrote: > > > But the way we calculate price indices is not the same as a scientific > measure. We rely of a select group of indicators, but the selection cannot > be determined scientifically. We have all sorts of potential measures of > price levels, by age group, by location, by income. Once we select the > measures, then we have to set weightings. > > I remember when Clinton had to decide whether gasoline additives were > treated as a quality improvement or as a cost increase. > > -- > Michael Perelman > Economics Department > California State University > Chico, CA > 95929 > > 530 898 5321 > fax 530 898 5901 > http://michaelperelman.wordpress.com > > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l > > -- Jim Devine / "Reality is that which, when you stop believing in it, doesn't go away." -- Philip K. Dick
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