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.
