Existence, enhancement, CPI bias, and progress

posted by
February 7, 2011
by Bryan Caplan  
Posted in Commentary

"Almost all economists agree that the official Consumer Price Index is biased upwards. Two key flaws with the CPI: It imperfectly accounts for (a) quality improvements, and (b) new products. The Boskin Commission famously estimated that the official annual CPI increase was over a percentage point too high. When you measure economic welfare over time, this seemingly academic issue has massive implications: Year after year, real income rises by over 1% more than official figures claim." (02/07/11)



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