Eric wrote:>The CPI likely has failed to take into account many declines in the quality of certain services and goods. While many economists have been interested in arguing (rightly in _some_ cases) that the CPI has sometimes failed to reflect quality improvements, few--if any--economists have been interested in detailing quality declines systematically. Where is the professional glory in this?
>In any case, the main failure when it comes to using the CPI is _not_
the particular techniques used to calculate the changed price of a bunch of goods/services, but in the EXPLICIT assumption the the CPI that
individual tastes and preferences remain _unchanged_ year-to-year.<
I don't remember, what's the difference between "tastes" and "preferences"?
>But over time tastes become "more demanding" as people get used to
better and better products. This factor is ignored by discussions involving the CPI.<
isn't being "more demanding" the same thing as having more needs? aren't a lot of these a result of objective circumstances rather than being totally subjective? (For example, indoor plumbing, a car, & a telephone are now _required_, whereas before they were optional. I quoted Jencks _et al_ to that effect awhile back.)
JD
