>and making everything in the “basket of goods” worse.
Given that food, energy, and shelter makes up the bulk of the CPI, I'm not sure how this can be done. The most plausible thing I can think of is "food is less nutritious than before", but I doubt that's an actual factor. "Food is getting less nutritious so I'm forced to shop at whole foods" isn't exactly a popular sentiment.
The first is you're using the Nationwide averages as opposed to the regional numbers for New York where a lot of these increases are much greater than on the nation.
The second thing is the way it includes housing is by using a thing called the owners imputed rent. And what that does is it tries to back out the rental from a housing unit. The problem is in New York City rent has been rising way faster than that.
30 is the cpi's consistently underestimated a number of its own provisions because of the way it does hedonics and substitution. It basically says that while meat might have risen 50% people switch to fish now and it uses in lower value for inflation.
The CPI over the last 30 years have been so massively game it's almost useless anymore
>The first is you're using the Nationwide averages as opposed to the regional numbers for New York where a lot of these increases are much greater than on the nation.
Another commenter has pointed out new york house prices actually rose slower compared to the rest of the country.
>The second thing is the way it includes housing is by using a thing called the owners imputed rent. And what that does is it tries to back out the rental from a housing unit. The problem is in New York City rent has been rising way faster than that.
Most Americans own their home. OER might not be perfect, but pretending that they pay market rent doesn't make much sense either. Even for people who don't own their home, new york has rent control, which provides similar inflation protections compared to owning a home.
>30 is the cpi's consistently underestimated a number of its own provisions because of the way it does hedonics and substitution. It basically says that while meat might have risen 50% people switch to fish now and it uses in lower value for inflation.
The part about hedonic adjustment is misleading. While it's true that such adjustments are used. It's only used for small minority of categories (basically clothes and technology), and doesn't include stuff like food (like in your example).
Meanwhile the part about substitution is straight up false:
Read that link. The BLS says "yes we try to adjust for the substitution, but really we are trying to calculate a basic level of satisfaction:
> In January 1999, the BLS began using a geometric mean formula in the CPI that reflects the fact that consumers shift their purchases toward products that have fallen in relative price. [It continues by saying it allows substitution withing categories and not between categories.]
This is exactly what I was saying. It has become a cost of living index, not a measure of inflation anymore. The hedonic adjustments can be laughably hand-wavy (it is a very difficult problem on how you measure inflation when using CPUs -- the real answer is you shouldn't and CPI's basked is a bad bad way to do it). That FAQ is always pretty funny and defensive (a lot of "give us a break -- it doesn't really affect anything much").
> Even for people who don't own their home, new york has rent control, which provides similar inflation protections compared to owning a home.
This is one of the huge issues. (1) Not sure if you live near NYC, but ask any new yorker about how much rent control has helped -- the answer is usually pretty low. don't have a heart attack looking at this rental rise in the last 5 years https://comptroller.nyc.gov/reports/spotlight-new-york-citys...
However that isn't the important part - rent control shouldn't effect measures of inflation -- this is precisely why CPI is bad. You can't legislate away inflation, you mere push the money around and prices rise asymmetrically but you still have the fundamental issue that CPI no longer even tries to measure -- too many dollas chasing too few goods. So you stop some of using those dollars on housing -- they just bid of something else instead.
CPI is a terrible horrible very bad measure of inflation. Its been that way since the 70s at least when the concept was turned on its head.
These are NYC tech workers. "Food" isn't broccoli beef stir fry at home for $8. It's dinner at Del Frisco's for $300.
You need to understand that when people bitch about the "cost of living", they're not speaking in broad terms. They're speaking in specific terms, inclusive of their insane budgetary choices that they believe are mandatory to be seen as high-status.
Yes, you can live just fine on the median income. But in order to have your ego stroked as the super important high class person that you obviously are, you have to spend some money. Choosing to live in NYC in the first place is certainly part of that, the rest is just gravy.
Can we stick to stats over caricatures? If we’re going to go by “gut feel,” the stereotype is that the status climbers primarily go into finance, consulting, medicine, and law - not engineering.
My work at FAANG and FAANG-adjacent companies would suggest that it’s far more probable that a random e.g. finance professional is driven primarily by perceived status than a software engineer.
The media and general public still openly poke fun at tech titans like Mark Zuckerberg and even Jeff Bezos in a way that they would never do to e.g. Jamie Dimon. The perceived statuses are still incomparable, and I think any competent Gen Zer knows it.
How about medical appointments with nurses instead of doctors?
I wonder if there is a similar measure for time kids spend in school. My kid comes home early every Wednesday, and there’s are ~15 other early dismissal days during the school year too.
I would bet almost everything that relies heavily on labor has been increasing in price faster than official figures for the basket of all goods and services.
"Food" listed in there is not food at all. Thats some cheap filler that isn't really affected by inflation that much because of its just cheap garbage subsided by govt.
Look at the junk in this section for exampe
> Cereals and bakery products
And ofcourse all the items in fruits and vegetables had the highest inflation.
>And ofcourse all the items in fruits and vegetables had the highest inflation.
A simple check shows this is false. The "Cereals and bakery products" category went up by 28.6% since January 2020, compared to 17.9% for "Fruits and Vegetables". You get similar conclusions if you use compare against January 2005.
No. https://www.bls.gov/cpi/factsheets/owners-equivalent-rent-an...
>and making everything in the “basket of goods” worse.
Given that food, energy, and shelter makes up the bulk of the CPI, I'm not sure how this can be done. The most plausible thing I can think of is "food is less nutritious than before", but I doubt that's an actual factor. "Food is getting less nutritious so I'm forced to shop at whole foods" isn't exactly a popular sentiment.