CPI Hedonic adjustments

[William Meyer]

One of the things I've always wanted to know more about is the cumulative effect of CPI hedonic adjustments over the years.  Or in other words, how much better does the BLS claim a modern TV is than a 1960 TV at same price.  I have checked with a couple AI's and there is some consistency in the results.  Seems a 2025 TV is about 12500% better than a 1960 one or 125x better.  Year 2010 TV to 2025 TV?  800% better.  Thoughts?  Reasonable?

[Joe Leote]

Hedonic adjustments are efforts to compare higher quality goods to lower quality goods at comparable prices. Computers, and to a lesser degree televisions, tend to sell at similar prices over time while the quality of goods purchased tends to increase. However the older, cheaper, lower quality goods tend to become obsolete, and some consumers might prefer to purchase lower quality at lower prices, so these consumers experience hedonic price inflation, even though the hedonic adjustment process tends to reduce the CPI indicating a reduction in inflation because the quality of goods is increasing at similar prices. The whole problem with dollar pricing in economics is that the only empirical data available are the prices at which goods trade at any moment of time. Everything else is a (hedonic) valuation model, for example, the assumption that goods trade at a price because the voluntary buyer and the seller both value the exchange of goods at the transaction price. Folk psychology is the general term for mind reading or imputing motives to others based on observation of their actions and knowing something about one's own mind in the dramatic context. Economics is bound up with politics because it cannot escape mind-reading efforts to account for human motivation and interaction in the political economy.

Joe 

On Sat, Dec 6, 2025 at 2:40 PM William Meyer <meye...@gmail.com> wrote:

One of the things I've always wanted to know more about is the cumulative effect of CPI hedonic adjustments over the years.  Or in other words, how much better does the BLS claim a modern TV is than a 1960 TV at same price.  I have checked with a couple AI's and there is some consistency in the results.  Seems a 2025 TV is about 12500% better than a 1960 one or 125x better.  Year 2010 TV to 2025 TV?  800% better.  Thoughts?  Reasonable?

--
You received this message because you are subscribed to the Google Groups "Understanding Money" group.
To unsubscribe from this group and stop receiving emails from it, send an email to understandingmo...@googlegroups.com.
To view this discussion visit https://groups.google.com/d/msgid/understandingmoney/CABEX-nBDeG0wFXOd-S2ukMeYPs2aZuYTJFJ_pVdqLA_VRohxaw%40mail.gmail.com.