The Big Mac index.
https://www.altoonamirror.com/opinion/2021/07/big-mac-inflat...
A $100k Prize for a Decentralized Inflation Dashboard
101–110 of 121 posts
Re: A $100k Prize for a Decentralized Inflation Dashboard
#102Real inflation is very hard to measure, because it's not only prices that change - more often the product loses quality while price stays the same. Either way, you are getting less for what you pay for, but only the price change is measured as inflation. In addition, people switch over to cheaper alternatives when products get more expensive - meat is replaced with vegetables for example. This changes the average bas…
Many things have also gained in quality substantially, such as vehicles, electronics, and durable goods. A new car not only lasts longer and requires less maintenance, is more fuel efficient, safer, but is often loaded with amenities like navigation, entertainment, self-driving. How do you make an equivalency to something from the 90s? Meanwhile digital content and communication services have become free and ubiquito…
Cars are really the best example but hard to tell because the change over time is so not so sudden.
My first car was 1988 Pontiac Sunbird from my parents. Inflation adjusted price is 26,000 in 2021 dollars.
I had one of the cooler cars in high school. If you look up a picture of it now, it is such a piece of shit I literally would not get in one.
Everyone complains about education cost but I take whatever classes I want online for free from some of the best Universities to have ever existed.
There is always someone that says this obviously ludicrously over simplistic statement that inflation is money printing and then cherry picks data that backs that up. Even though it is just as easy to cherry pick data that shows that point is stupid.
We can't measure "inflation" in the general sense because we have no definition of what that even really means.
Re: A $100k Prize for a Decentralized Inflation Dashboard
#103Earlier quoted context omitted.
Loss of quality is totally missed in the CPI. Take this example. A restaurant hires rookie waiters because they can’t pay the more experienced staff. Your meal still costs $50. But is it worth this same? Not at all.
Where I live it's been about a decade since waiters were anything except glorified conveyer belts that serve no purpose except to move my food from the kitchen to my table, and if anything that has drastically increased the quality of my meals. I'm not really sure what value an experienced waiter would provide.
I prefer restaurants where I pick up the food at the counter and bus my own dishes. Saves me time and hopefully some of the money saved by not having waiters goes towards reducing prices, better quality ingredients, and better paid cooks.
Re: A $100k Prize for a Decentralized Inflation Dashboard
#104Earlier quoted context omitted.
How I interpret their methodology is they are trying to estimate the change in costs for existing owners. Is that correct? What I feel is that mortgage payments have doubled in 10 years for new buyers. However, because new buyers are a small fraction of existing buyers this doesn't rapidly affect inflation as they calculate it. Thanks for trying to explain it, I feel pretty dumb as I'm clearly missing something obvio…
Conceptually, it's useful to think of a house as an investment good that produces housing services (shelter, living space, etc.). These housing services are what you get when you rent a house. If you're a home owner, you don't pay rent explicitly, but it really is as if you had rented out your house to yourself and you were paying rent to yourself. Therefore the cost of housing services is best estimated through rent…
Thanks for your time. Renting looks like simpler to estimate, but it confuses me as well.
> Every month, the rental prices paid by the households in the sample are compared with the rental prices they paid the previous month
When rent control caps rent increases this becomes a lagging indicator. Why don't they try to estimate market rent?
This feels similar to my problem with the owner cost estimate. Consider a hypothetical about cars - in a world where everyone buys new cars with 8 years of financing, suddenly there is a car shortage (chips or whatever). The price of a new car doubles. As very few owners need to buy a new car every year, on average their costs are about the same as last year despite a 100% increase in the cost of a new car.
Re: A $100k Prize for a Decentralized Inflation Dashboard
#105Real inflation is very hard to measure, because it's not only prices that change - more often the product loses quality while price stays the same. Either way, you are getting less for what you pay for, but only the price change is measured as inflation. In addition, people switch over to cheaper alternatives when products get more expensive - meat is replaced with vegetables for example. This changes the average bas…
You measure it with things that are identical. Futures markets are a good example, steel, lumber, cattle, etc...
As someone that raises grass-fed beef, I can tell you with certainty that not all cattle are identical. Commodity prices give you commodity quality.
Re: A $100k Prize for a Decentralized Inflation Dashboard
#106Real inflation is very hard to measure, because it's not only prices that change - more often the product loses quality while price stays the same. Either way, you are getting less for what you pay for, but only the price change is measured as inflation. In addition, people switch over to cheaper alternatives when products get more expensive - meat is replaced with vegetables for example. This changes the average bas…
You measure it with things that are identical. Futures markets are a good example, steel, lumber, cattle, etc...
even lumber isnt identical. old lumber was made from older trees that were generally more dense and a harder wood.
http://www.historicdoors.co.uk/blog/old-growth-wood-better-n...
Re: A $100k Prize for a Decentralized Inflation Dashboard
#107this sounds like the typical scam where they already have someone in their circle working on exactly this, and they’re just announcing a competition to get media attention before they end up picking that team as the “natural” winners.
Re: A $100k Prize for a Decentralized Inflation Dashboard
#108Earlier quoted context omitted.
What if those budgets have significantly less buying power? Especially in critical areas like housing, healthcare, and education?
Then people will tend to buy less of them to fit their budget. Here is the most telling chart: inflation-adjusted wages in the US [0]. They never change, because the CPI uses a survey to determine what the average American is buying, and how much it costs, then they adjust weights based on how much they spend on it (which cancels out the cost because people change their buying preferences based on current prices) and…
Is it possible people are buying less by volume, even if amounts spent level off? For example smaller homes, less healthcare, getting less educational value per (adjusted) dollar spent?
Re: A $100k Prize for a Decentralized Inflation Dashboard
#109Real inflation is very hard to measure, because it's not only prices that change - more often the product loses quality while price stays the same. Either way, you are getting less for what you pay for, but only the price change is measured as inflation. In addition, people switch over to cheaper alternatives when products get more expensive - meat is replaced with vegetables for example. This changes the average bas…
Many things have also gained in quality substantially, such as vehicles, electronics, and durable goods. A new car not only lasts longer and requires less maintenance, is more fuel efficient, safer, but is often loaded with amenities like navigation, entertainment, self-driving. How do you make an equivalency to something from the 90s? Meanwhile digital content and communication services have become free and ubiquito…
> How do you make an equivalency to something from the 90s?
Many of the bells and whistles on cars should decrease its value as compared to a 90s car because it drastically increases repair costs.
Re: A $100k Prize for a Decentralized Inflation Dashboard
#110Earlier quoted context omitted.
Take a look at Argentina 2007-2016 [1,2,3] [1] https://en.m.wikipedia.org/wiki/MIT_Billion_Prices_project [2] https://www.hbs.edu/faculty/Pages/item.aspx?num=54491 [3] https://en.m.wikipedia.org/wiki/Cristina_Fernández_de_Kirchn...
What happened in Argentina 2007-2016 that would suggest censorship-resistance in a prices database is a feature that makes sense?
The government misreported inflation figures. (According to the people who made the price database)