Re: CPI a fraud?

On Tue, 06 Sep 2005 17:42:19 GMT, "Bill" <xxx@xxxxx> wrote:

><royls@xxxxxxxxx> wrote in message
>news:431de720.12861092@xxxxxxxxxxxxxxxxxxxxxxxx
>> On Tue, 06 Sep 2005 06:11:31 GMT, "Bill" <xxx@xxxxx> wrote:
>>
>>>Why could it not be that whomever
>>>originally developed the process could not come up with a better way?
>>
>> A bright high school student could come up with a better way. And in
>> fact, the original process did not have the fraudulent "hedonic
>> adjustments."
>
>I have no idea what you mean by that.

The BLS website should be able to help you.

>Is it a common term?

Yes.

>What would be an
>outline of a better way

No hedonics, for one. Focus on standard items for another: a gallon
of gas, a loaf of bread, etc.

>- keeping in mind the frequency of moves and that
>those paying higher prices may also get higher prices for what they are
>selling.

That is exactly what the CPI is supposed to be measuring: changes in
general price levels.

>>>Also as
>>>the cost of rents to the rentors goes up, the CPI goes up.
>>
>> If imputed rents go up in the absence of any investment in
>> improvements (i.e., if land rent increases), it is _assumed_ that
>> there is a "hedonic" improvement, and the land rent increase is
>> _subtracted_ from the consumer price basket rather than being added to
>> it.
>
>That makes no sense.

I'm not the one doing it.

>What you are saying is that if rent goes up in the
>absence of improvements then it is assumed land rent is subtraced from the
>CPI. Why?

To reduce both the officially acknowledged rate of general price
increases (especially of assets) and the officially acknowledged
aggregate rent of land.

>>>But if someone
>>>buys a new place, the price of land is reflected in their cost and they will
>>>attempt to recover that.
>>
>> And if someone owns an old place long paid for, they will attempt to
>> "recover" the price the land _would_ fetch if it were sold today. So
>> what?
>
>So as the price of land goes up, rents will increase and the CPI will go up.

Nope. Imputed rents (which account for 2/3 of the housing component
of the CPI) are not calculated based on the price of land.

>You argued that land rent increase is subtraced from the consumer price
>basket - though you did not define that term.

The CPI is calculated using a "basket" of goods and services that is
alleged to represent typical consumer spending.

-- Roy L
.

Relevant Pages

  • Re: 1911 Reference Book Defines Georgism
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  • Re: CPI a fraud?
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  • Re: Smith and Mill: Georgists?
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  • Re: 1911 Reference Book Defines Georgism
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  • Re: CPI a fraud?
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