>Does anyone else fine this to be more than a bit off?
>
>At 11:59 AM 6/6/97 -0700, Richardson_D wrote:
>>BLS DAILY REPORT, THURSDAY, JUNE 5, 1997:
>
>>Fueled by the issue of quality changes, the CPI debate rolls on, says
>>Business Week (June 9, page 68). Among the quotes is one that says a
>>Boskin panel member says that he gets better data on consumer prices
>>by thumbing through old "Consumer Reports". For most products today,
>>the BLS uses a crude method for estimating quality changes. Say a TV
>>set disappears from the shelves, replaced by a new model with a better
>>picture costing 5 percent more. If the inflation rate of other TVs
>>was 2 percent, then the BLS assumes that the rest of the increase, 3
>>percent, can be attributed to higher quality -- namely the better
>>picture. But the true test of quality is how the new set sells. For
>>instance, if it gains market share, the quality must have risen more
>>than the BLS's 3 percent. Yale University economist William D.
>>Nordhaus says: "We actually don't know how much quality change exists
>>in the BLS numbers."
>
>If it gains market share, it might just be that it is the quality of the
>hype not the product that accounts for better sales. The product quality
>could be no better than the competition's. Otherwise, if you believe what's
>said above, you would have to conclude that Camel's really are superior to
>Winston's, ignoring how seductively Joe Camel has hooked all those kids.
Oh, give it up, Michael. You know that the argument must be right under the
conditions of perfect competition: many buyers and sellers, homogeneous
products, perfect information, no barriers to entry or exit. Get with the
program already.
;-)
************************
Blair Sandler
[EMAIL PROTECTED]
