Cameron Murray (@fresheconomicthinking): "According to the US CPI, the nominal price of televisions has fallen 98.4% since 1997. Which means that a TV that cost $500 in 1997 costs $8 today. Does that make sense? One issue is that a lot of this apparent decline is quality adjustment, which is widely applied to goods…"

According to the US CPI, the nominal price of televisions has fallen 98.4% since 1997.

Which means that a TV that cost $500 in 1997 costs $8 today.

Does that make sense?

One issue is that a lot of this apparent decline is quality adjustment, which is widely applied to goods but not services.

I describe the issues with quality adjustments here

Lower bound problem of hedonic price indexes

Apr 1

4:32 AM