Hedonic indexes are a bit of scientism that tries to account for increases in quality. With electronics, if you buy a TV in 2015 for $800 and a larger TV in 2022 for $800, notionally the newer TV is better so you need to account for that change by making the newer TV appear less expensive.
American Economics Thread
- Thread starter Bernard
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No. The mean and median size of all residential housing in the U.S. increases since larger new housing was replacing smaller older housing and new housing being constructed at the extensive was larger than the mean of existing housing. Replacing X with X+1 in the series makes E[X] go up. Similarly, a dataset with a mean X that has values added of X+1 will see its new mean be higher than X.
New housing starts being smaller also is ambiguous since renter frequencies are declining, if the only people buying houses are renters, average new home construction can be smaller it was in preceding years and still make median housing sizes increase.
Sticker housing costs are thus not directly comparable across time for the inflation series.
Yeah that’s the consumer expenditure survey which is conducted annually
That only makes sense if the older TVs are still generally available in the market. There is no quality substitution if the original articles no longer exist.
LCD/OLED TVs are better than CRTs but good luck trying to find buy a CRT today from a reputable seller.
Modern cars are also a lot better than a Model T, so by adjustment there has been no inflation in car cost. Let's see you find a Model T to buy today.
So there's no quality adjustment when the choice is have or don't have. It's just misleading statistics.
I think it’s conceptually fine (inflation tries to measure the price of the same goods across time, not more goods, not different goods) but it has a scientism element to it. The hedonic indexes are published anyways so anyone can calculation ex-hedonic CPI
I can't comment on BTC. I can comment on gold, and let y'all extrapolate the conclusion to BTC.
Gold is a ledger, it is essentially an IOU. It worked in ancient times because it was impossible to clone (money printing) and it was rare enough to be used in the barter system. Before gold, people used sea shells, stone tablets... etc. at the end of the day, it was just an IOU.\\
We used gold in the past because we can't inflate it. The USA just keeps printing money.....
There is no need to argue about hedonics. Just look at the grossery prices, rent, utility bills, healthcare and education costs and more in the US. Its all going up and real wages cannot keep up.
This is the result of decades of easy monetary policies to support asset prices and economic policies that supports consumption and speculation. Tens of trillions of dollars have been borrowed by the US and it has gone into wealthfare, warfare, speculation and consumption of (increasingly) foreign made goods. None of these things are economically productive and therfor bad debt is pilling up in the US economy faster than any other country in history. Inflation is rising in the US today because the amount of easing (read printing) that has to be done in order to keep these unproductive activities going has overwelmed the system.
This is the result of decades of easy monetary policies to support asset prices and economic policies that supports consumption and speculation. Tens of trillions of dollars have been borrowed by the US and it has gone into wealthfare, warfare, speculation and consumption of (increasingly) foreign made goods. None of these things are economically productive and therfor bad debt is pilling up in the US economy faster than any other country in history. Inflation is rising in the US today because the amount of easing (read printing) that has to be done in order to keep these unproductive activities going has overwelmed the system.
Your thought process highlights that you misunderstand the true purpose of gold investing. It isn't a hedge against being robbed by a government that has jurisdiction over you/your assets. There is very little you can reasonably do about something like that. It is just a hedge against inflation of the main currency in which you earn and in which you spend.
FriedRiceNSpice
Captain
Purchasing real estate is not an expense, it's an long term capital asset investment. Renting is an expense so consumer inflation should consider rent, rather than home prices (though the two are correlated).
Conceptually fine, yes. But practically problematic. How do you objectively calculate how much more value a newer product offers over an older product, across thousands of different products? For any product, a determination of the metrics by which to assess its value is a subjective determination, so it is impossible to have a objective hedonic index. Using TV as an example, you may determine that resolution should be heavily weighted as a measure of value, whereas I may argue that refresh rate should be weighted more heavily.
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I just posted a another The National Interest article over at the Chinese Economic Thread that I agree with.
And now I'm posting this article about the US economy here. The National interest is on a roll and is now just spitting truth after truth.
And now I'm posting this article about the US economy here. The National interest is on a roll and is now just spitting truth after truth.
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