
Shrinkflation - kaffeemitsahne
https://en.wikipedia.org/wiki/Shrinkflation
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reallydontask
My limited understanding of inflation calculations is that this should result
in a _increase_ in inflation as we're getting less product for the same price.

I read a long time ago about some quirks of the inflation calculations:

Say 27" TVs are part of the basket of products, but it's no longer so easy to
buy a 27" TV, so they pick up the next size up, say 32" and the price is the
same as for 27" but because this is a better TV (bigger for sure), it is
deemed that the price of TVs have fallen as your buck can buy more TV.

I would dearly love for somebody with knowledge of the subject to
confirm/deny/clarify the above

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SuoDuanDao
Eric Weinstein, physicist, economist, and podcaster has referred to a pretty
nasty fight he and his wife had about this very thing - I believe he calls it
the problem of hedonic substitution, and he and his wife had come up with a
theory that could model it rigorously (gauge theory) but as far as I know he's
never discussed gauge theory for laypeople.

here's a clip from an interview where he discusses the subject:
[https://www.youtube.com/watch?v=2xiEEtoa-_4](https://www.youtube.com/watch?v=2xiEEtoa-_4)

Edit: I realize I worded that misleadingly - he and his wife were on the same
side, against government economists who wanted to be able to estimate the
value of hedonic substitution on an ad-hoc basis.

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adrianN
Gauge theory is already a thing in physics. Maybe he should come up with a
different name?

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SuoDuanDao
My understanding is that his innovation was applying gauge theory to
calculating the 'real' rate of inflation. But the only academic talk of his
I've seen assumed a base level of knowledge which I don't have.

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smitty1e
When it comes to the atrocious American diet, smaller fast food portions could
be as much a feature as a bug.

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bbczfvhmj
Yes, but that’s irrelevant.

Americans are being told inflation is _x_ because the CPI doesn’t normalize.

And this has huge socio-economic consequences

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headbansown
The CPI has been gamed into uselessness because governments and corporations
have indexed things like pension increases to it. The "hedonic substitution"
concept is particularly disingenuous. Seniors can't afford steak any more and
buy hot dogs instead? Inflation's gone down, yay!

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headbansown
I believe Consumer Reports used to show instances of this and call it the
"grocery shrink ray." Corporate greed and willingness to deceive: news at 11.

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lotsofpulp
What is the deception? Are the measurements correct on the packaging? Does the
calculator app on phones work? It’s really not too much to ask people to
divide price by quantity.

Choose to give business to shops that show unit prices.

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14
In 2018, Koopmans reduced the weight of their buckwheat flour packages by 20%
from 500g to 400g - claiming 'renewed' on the package, without specifying that
'renewed' only meant that less product was provided. It is unknown whether
wholesale prices were affected, while it is certain that retail pricing
remained exactly the same.

From the article, this example almost seems as if there was a deception. They
claim their product is "renewed" but in reality all they have done is lessen
how much you get. If I read renewed I would think they have changed the
formula of their food, hopefully for the better, and that is why I am
receiving less of their product. The fact is, nothing was changed, there is no
renewed product and I am being sold less for more. Yes the price is still
listed and I can make a decision as to if I buy it or not but be honest in
this situation the company putting "renewed" on the packaging is hoping you
believe they have improved their formula.

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lotsofpulp
> If I read renewed I would think they have changed the formula of their food,
> hopefully for the better, and that is why I am receiving less of their
> product.

Why would you think that? If I read renewed, I would think that it’s some BS
marketing, since there was no verifiable claim made.

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wcoenen
In the EU, the price indication directive helps consumers to deal with this.
In addition to the item price, unit prices (e.g. per kilogram or per liter of
product) must also be indicated.

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edw
I have no idea whether there are any regulations in the US regarding this, but
nearly every chain store that sells grocery products also lists prices
normalized to some product-relevant unit. These prices are on the shelves,
directly next to the actual price, often in another color.

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headbansown
That is the case in the U.S. as well. Although I've seen unit pricing of
products in different sizes use different units (e.g. one product using ounces
and the other quarts) that if not done deliberately to make comparison
difficult still has that effect.

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namibj
Not a problem with metric units.

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gruez
Only if the density is close to that of water. A quick google search says that
approximating 1g = 1ml would work for yogurt (1.04g/ml), but not for honey
(1.40g/ml).

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namibj
They don't mark out honey in different base units. Some things are sold by
volume, but even yogurt is sold by mass. It's partially because packing
density is rather variable between different sources/grades, and also not as
easy to handle as weight (just add on top, and don't care about the shape of
the contents of the bowl).

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netcan
I think to claim an x-flation, you need to be describing more than just a
price/quantity change. It has to be at "monetary" scale.

Anyway, the end of definition for shrinkflation (or inflation/deflation
generally) is the interesting part these days

" _process of items shrinking in size or quantity, or even sometimes
reformulating or ^^reducing quality ^^_ "...per dollar.

Shrinking burger sizes (most of the Wikipedia examples, amusingly) aren't a
trend to be worried about. There's only so much that can go under the radar.

 _Reformulating or reducing quality_ OTOH... This one is a total black box in
many senses. It's hard to say if services are increasing/decreasing in
quantity and quality. These are far less legible than steel & automobiles.

What's the price controlled trend in quantity/quality for financial services,
legal services, etc. educational services.... These illegibles are trending
up, as a proportion of the overall economy, so _their_ trends matter a lot.

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madiathomas
Coca-Cola South Africa reduced the size of a can from 340ml -> 330ml -> 300ml.
Their justification was that the government introduced sugar tax to fight
obesity. Yep. We do have African countries with obesity problems. Price has
always gone up. Anyway, it is a healthy move. They must reduce it further and
we will have a healthy nation.

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14
Here in British Columbia we just raised the cost of a can deposit from 5 cents
to 10 cents. I already whined about the size of the can decreasing and now you
pay twice as much deposit for even less pop. Overall I only ever drink pop
rarely but with the added deposit I have been reconsidering if such a small
pop size is worth my money at all.

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doe88
This year in France, Coca Cola reduced the standard size of their bottles from
1.5L to 1.25L while keeping the same price. If I remember correctly the main
argument was to handle a new tax on soft drinks without (overtly) increasing
prices.

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demosito666
This is pretty bad in Russia now. Since economy and real incomes are
shrinking, it's hard for retailers to just raise the price. So everything is
shrinking in volumes, literally all groceries now have smaller package than
two years ago.

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gorgoiler
Inflation is commonly measured against the price of goods, at the consumption
end of the pipeline. Are there other measures of inflation that incorporate
the price but where it is also normalized by what consumers actually get for
that price?

Somewhat flippantly as an additional example to shrinkflation, if price
indices now incorporate AAA games, how do they account for Fallout 4 (2015,
85% rating) versus Fallout 3 (2008, 90% rating)?

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jmpman
Just noticed this on toothpaste from Costco.

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tudorw
Same with discount supermarkets, they seem to have a supply of almost
identical products, but with more 'air' in the box and a visually competitive
price, but per KG not competitive, not all supermarkets show the price
conversion, and if you are a mother of 3, with 30 minutes to buy groceries
it's not really meant to be a challenge to understand the value offering of a
product, 'supermarkets' markets are not super efficient markets, they are
leased boxes where various mega-corps battle it out for who can sell some
basic low-grade ingredients for a significant mark up.

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dannyw
Keep in mind that on most items, supermarkets have margins of just a few
percent. There’s a reason why everything else tends to be more expensive, but
you are right that the quality of goods sold have seriously declined and
continue to decline.

