article titled: “Addressing misconceptions about the Consumer Price Index”
for what it is worth, there is a new article from the monthly labor review, August 2008, titled "Addressing misconceptions about the Consumer Price Index" I apologize if this has already been posted somewhere else.
here’s the link: http://www.bls.gov/opub/mlr/2008/08/art1full.pdf
it begins by stating:
"A number of longstanding myths regardingthe Consumer Price Index and its methods of construction continue to circulate; this article attempts to addresssome of the misconceptions, with an eye toward increasing public understanding of this key economic indicator"
Below is a "summary" of the article
IT IS HOPED THAT THIS ARTICLE HAS PUT TO REST some of the misconceptions and myths about the CPI. It is a myth that the BLS reduced the growth rate of the CPI by assuming that hamburger is substituted for steak. It is a myth that the use of hedonic quality adjustment has substantially reduced the growth rate of the CPI. It is a myth that the 1983 adoption of owner’s equivalent rent systematically reduced the growth rate of the CPI shelter index. Finally, it is a myth that Social Security payments are updated by a CPI that does not include food or energy.
Thank you for the post, it is an interesting read.
I cannot say that it particularly makes me feel the figures are any less manipulated. Perhaps to make substitution a little clearer and fairer they should study a hell of a lot more products. I still cannot believe that CPI is so poorly constructed. But hey, where is the fun in telling the truth exactly as it is, accountants and economists are artists lest we forget.
Sorry to dig up an old thread, but John Williams specifically responded to that article on his ShadowStats website: