The Fallacy of “Measuring” Inflation \ stacker news ~econ

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The Fallacy of “Measuring” Inflation mises.org/mises-wire/fallacy-measuring-inflation?utm_source=MI+Subscriptions&utm_campaign=5a84c88f64-EMAIL_CAMPAIGN_2024_02_29_06_22_COPY_01&utm_medium=email&utm_term=0_-0aec14e5f3-230095776

372 sats \ 10 comments \ @Undisciplined 10 Jul econ

By Patrick Carroll

While we often speak of measurements of inflation (such as “inflation went up by 3 percent”), in reality, one cannot accurately measure it, given official measurements consist of arbitrary weighted averages. It is better to see inflation as qualitative, not quantitative.

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53 sats \ 8 replies \ @Scoresby 10 Jul

It’s hard to ditch a useful term—even if it’s wrong.

Ain't that the truth. I don't like the proposed replacement, though. Quantify is only very slightly better.

There is a certain allure to the Big Mac index.

155 sats \ 3 replies \ @Signal312 10 Jul

In Zimbabwe during the hyperinflation there was a "3 boiled eggs" index, that was actually reported on in financial reports.

The Big Mac index seems too changeable. It might just be me, but I feel like hamburgers have been getting thinner.

Yesterday I had a reminder of shrinkflation - I just looked in a bathroom cabinet, where we had stocked up on some shampoo on sale. The new bottle vs the old one (bottle size was different, but both were called a "family pack" and were otherwise the same) was a shrinkage of 15% in contents.

162 sats \ 2 replies \ @Scoresby 10 Jul

Parker Lewis has been doing a yearly check on the price of ribeye at the same grocery store for five years.

144 sats \ 0 replies \ @LibertasBR 18h

I like these unofficial and localized data collections — precisely because they’re not a general snapshot, they avoid the biases of locations and seasonal patterns that don’t matter to me.

0 sats \ 0 replies \ @nitter 10 Jul bot

https://xcancel.com/parkeralewis/status/1933559829185884662

42 sats \ 2 replies \ @Bell_curve 10 Jul

Also grocery store prices are an excellent gauge because they can’t gouge. Profit margins are 1 or 2 percent

53 sats \ 1 reply \ @LibertasBR 18h

I agree. Official measurements aren’t reliable since the methods, no matter how open they are, don’t guarantee that the data was collected properly.

0 sats \ 0 replies \ @Bell_curve 15h

In Brazil you can gauge inflation by the price of cheese bread and caipirinha

113 sats \ 0 replies \ @Undisciplined OP 10 Jul

I’m not sold on the solution either. I just think these methodological critiques are useful context for interpreting official statistics.

47 sats \ 0 replies \ @0xbitcoiner 10 Jul

Clean links, no tracking BS? Much hotter!

http://mises.org/mises-wire/fallacy-measuring-inflation