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
The definitions of baskets of goods used to measure inflation tend to be changed over time to represent changes in consumption, such as 27" TV to 32" like you mention. As the 32" TV would be more expensive, this would create sudden inflation, however, this is diluted by the large size of the basket.
The quantity or size of the product is not important for measuring inflation, unless it creates a change in consumption. E.g. do people now buy two chocolate bars to sate their appetite? Do people buy fewer TVs because a TV of twice the areal size can substitute two smaller TVs?
here's a clip from an interview where he discusses the subject: 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.
There are many ways for the conversation to go if you want to get try an understanding of gauge theory. Joe Rogan is not on any of those many branching paths.
The fact that lower prices might lead people to buy larger TVs is no more surprising than a fall in the price of meat leading people to buy more steak.
You get a bigger TV for the same price but this is not the same thing as a lower price for the same TV, which is what most people would recognise as lower inflation.
That's why I said it was a quirk
It's not very different to finding out you can buy a 12-pack for as much as a 6-pack used to cost. Also deflation.
it's correct - improvements to tech is considered this way as well. I personally don't believe this is a good measure.
Americans are being told inflation is x because the CPI doesn’t normalize.
And this has huge socio-economic consequences
The problem with US CPI is that the nation isn’t moving in the same direction as a whole, with some places and populations making gains far greater than others. It’s impossible to capture this one metric.
It isn't perfect - arguably there is no such thing as a perfect way of capturing the differences between changes in what's available and what's expected over time with respect to things like CRT vs LCD monitors - but portion sizes are relatively simple for adjustment
Choose to give business to shops that show unit prices.
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.
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.
Unless one is suggesting legislation requiring the use of certain package sizes, I don’t understand why people shouldn’t be expected to suffer the consequences of not understanding the concept of unit price.
It would be interesting if sellers were required to show a 52 week graph of unit price though with each product.
In this case, the relevant information for a buyer is clearly stated, and accurate, and no false information has been conveyed. The buyer simply has to check the unit price and ignore the other words.
Yes, because reasonable regulation requiring clear communication to consumers about product changes == outlawing marketing.
We already have a system. Show the amount of product being sold. Show the price. Require showing unit price, if anything. Any more is unnecessary.
And oh, the horror that taxpayer money might be spent protecting the public. I'm down for that.
* Need to maximize profits.
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.
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)?