Thursday, April 18, 2019

On the Government Measuring of Price Inflation and the Downsizing of Product Size

Peter T. emails:
Do you know if any work has been done on the silent inflation that occurs when manufacturers downsize the quantity of a product? I believe this is a significant factor not accounted for in official inflation data. I wonder how much products have been devalued by quantity since say 2000 or 2009 and what influence that puts on CPI data. How much of the current official CPI figures are being held down by downsized quantities?
RW response:
I have talked to people very familar with the collection of this price data. I am very comfortable that they adjust for changes in quantity size for the CPI data.

1 comment:

  1. I have studied silent inflation for the better part of a decade and it is the inflation that robs you in plain sight with no consequences.

    The packaging industry is every bit as evil in its impact as bad central bankers are in the world of finance. Its a shell game that NO ONE talks about.

    It is also endemic to the support for monopolies in the US marketplace. There are no checks and balances of competition. These manufacturers can play on the ambivalence and cluelessness of the Idiocracy so long as they keep buying less of the product for more money and dont complain.

    But lets see how it goes when silent inflation has to march to the drum of systemic inflation. Like the current retail conflagration I look forward to some of these companies pleading bankruptcy