In this case, yes. It's been years since I spoke with the BLS about
this, but when I did, they told me that tighter advance purchase
restrictions, and the conversion of nonstop into one- and two-stop
flights were actually hidden price increases.
Somewhere Robert Gordon argued that if you used hedonic techniques on
the prices of women's clothing, you'd find large price increases
hidden in seasonal fashion changes. Of course, most economists are
only looking for reasons the CPI is overstated, not understated.
Doug
On Sep 22, 2006, at 11:41 AM, Michael Perelman wrote:
Are you saying that the index really takes account of quality?
On Thu, Sep 21, 2006 at 10:11:44AM -0400, Doug Henwood wrote:
On Sep 21, 2006, at 9:54 AM, Jim Devine quoted Jared Bernstein:
Sorry to wax anecdotal, but I'll bet price
changes in air travel are not reflecting the declining quality of
that
sector.
Actually they do: the airfare component of the CPI is up about 333%
since 1980, while the overall index is up 160%.
