To: xzins
Are you serious? Thats amazing. They actually deduct the value of the additives in gasoline because they consider it better quality?
That is amazing deceit.
So, regular gas might be 3.50, but theyll say its actually 3.30 (or whatever the deduction is.
Yes. The tool is called Hedonics or Quality Adjustment.
Here's the BLS definition of Hedonics or Quality Adjustment in its own words:
The hedonic quality adjustment method removes any price differential attributed to a change in quality by adding or subtracting the estimated value of that change from the price of the old item.
If you go to this
link to CONSUMER PRICE INDEX--JANUARY 1995 and read down you will find:
QUALITY ADJUSTMENT FOR GASOLINE
A quality adjustment has been made to gasoline prices used in the January CPI to account for the effects of the mandated introduction of reformulated gasoline in selected areas of the United States.
The gasoline index rose 0.4 percent in January, following seasonal adjustment. Without the quality adjustment, it is estimated that this index would have increased 1.1 percent. In those areas required to sell the reformulated gasoline, virtually all of the January price quotes were for reformulated gasoline.
If you go
here you will see step by step by the BLS justifies subracting 7.1% from the price of a new TV before counting it in the CPI.
138 posted on
02/21/2014 9:31:26 AM PST by
khelus
To: khelus
So my 3.50 gas doesn’t really cost me that much. Wonder if the gas station will reimburse me the difference. LOL.
139 posted on
02/21/2014 9:32:59 AM PST by
xzins
( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
To: khelus
I’m sitting here shaking my head. They just turned a $250 TV into a $1350 dollar TV so they could compare it to a $1250 dollar TV to say that the price of the $1250 compared to the $250 had actually fallen by 7%.
Houdini and David Copperfield would beg to know that trick.
Would I agree to using the future value of $250 to compare to $1250? Sure. If it were a 10-15 year span, just use the inflation adjustment for those years.
$250 might be $500 after 10 years.
Wonder what they do with the government light bulbs versus the old incandescents? $5 versus 25 cents, when it isn’t an improvement at all. Less light, more toxic, worse fit, etc., etc., but they do (sort of) last a bit longer. My best case is 2 years versus 1 year.
140 posted on
02/21/2014 9:43:12 AM PST by
xzins
( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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