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this post was submitted on 15 Aug 2025
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You're leaving out the substitution principle.
If a can of Spam becomes cheaper than actual meat then the CPI will substitute them as "equal". Cheese Wiz is just as "cheese" as stuff that comes out of a cow.
CPI is nothing but a gamed statistic. It's fake. Even then they can't pretend all is hunky dory.
So, the very complicated and expansive version of what you are talking about is Hedonics, Hedonic Adjustments... and lets just say it is so fucking technical and complicated that as I have said elsewhere in this thrrad, I basically have PTSD from trying to have detailed discussions about which elements of this are valid and to what extent they are valid.
Its not quite as simple and straightforwardly bullshit as you describe, but it also does functionally end up resulting in the general bullshit that you do describe... its just that quantifying the exact amount of bullshit happening, due to illegitimate hedonic adjustments... is a statistical and accounting nightmare.
Wouldn't hedonic adjustments go the other direction from what the parent comment is saying? If the quality goes down, then the adjustment should increase the stated inflation.
I read the parent comment as talking about substitution effects in consumer behavior, but the CPI doesn't reweight month to month (it used to only adjust once every few years, but has recently switched to once a year).
So generally, substitution bias makes the CPI overstate the inflation as actually experienced by the typical household.
Substitution bias tends to overstate inflation, because they only reweight once a year (which is much more frequently than what they used to do). And the reweighting of the components won't change the fact that the individual components continue to be published.
Beef is getting much more expensive than it used to be. In the 90's, ground beef used to be cheaper per pound than chicken breast. In the 30 years since, beef has gotten expensive much faster than chicken, and now ground beef costs almost 50% more than ground beef:
Ground beef
Chicken breast