Quote:
Originally Posted by jwslam
I feel like I know the exact house... Brown carpets in Macewan?
How does this even accurately reflect inflation though?
In the 60's a family of 4 was happy with 1200sqft, 3 bedrooms one bathroom to be average.
Nowadays that same family wants 2200 sqft 5br + fully developed basement, 3 bathrooms with double vanities in each, 80sqft dedicated to a jetted tub that she uses twice a year, a toilet to be used only by guests that come over 3 days year, along with their leased BMW and Audi.
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They make hedonic adjustments to the inflation rates though. So if the new version of what they're measuring is 10% better, they adjust the price accordingly.
That is actually a big reason why inflation has been so low. A car that is consistently 25,000 but now has a bunch of extra features gets counted as deflation because the new version is better.
This is an especially big factor with things like TVs, computers, phones, etc.