Using their ridiculous point, if Ferari had a sale last month that dropped their cars down to an average of 100 grand, how does that help the price of chuck roast that’s gone from 2.89 a pound to 4.89 a pound in 2 years. I saw it at Wal-Mart a few weeks ago at 6.39 a pound. Chuck roast....ALWAYS considered a low cost, undesirable cut.
When the cost of food rises, does the CPI assume that consumers switch to less desired foods, such as substituting hamburger for steak?As for the Ferrari example? It's so dumb I can't wrap my mind around it.No. In January 1999, the BLS began using a geometric mean formula in the CPI that reflects the fact that consumers shift their purchases toward products that have fallen in relative price. Some critics charge that by reflecting consumer substitution the BLS is subtracting from the CPI a certain amount of inflation that consumers can "live with" by reducing their standard of living. This is incorrect: the CPI's objective is to calculate the change in the amount consumers need to spend to maintain a constant level of satisfaction.
Specifically, in constructing the "headline" CPI-U and CPI-W, the BLS is not assuming that consumers substitute hamburgers for steak. Substitution is only assumed to occur within basic CPI index categories, such as among types of ground beef in Chicago. Hamburger and steak are in different CPI item categories, so no substitution between them is built into the CPI-U or CPI-W.
Furthermore, the CPI doesn't implicitly assume that consumers always substitute toward the less desirable good. Within the beef steaks item category, for example, the assumption is that consumers on average would move up from flank steak to filet mignon if the price of flank steak rose by a greater amount (or fell by less) than filet mignon prices. If both types of beef steak rose in price by the same amount, the geometric mean would assume no substitution.
“help the price of chuck roast that’s gone from 2.89 a pound to 4.89 a pound in 2 years. I saw it at Wal-Mart a few weeks ago at 6.39 a pound. Chuck roast....ALWAYS considered a low cost, undesirable cut.”
Laughable how high all meat prices are today. The cheapest, crap cuts at Walmart are priced like good steak. Ticked me off so much that I broke down and bought a 1/2 beef from a buddy last month. No more “market priced” junk meat.
I get a kick how many people take the Jon Stewart approach when it comes to higher consumer prices for necessities = mock and snicker.
I figure eating for one is cheaper at fast food joints by the time I buy the meat, bread by the loaf that I never use before it goes bad, the veggies, it is cheaper then buying this stuff and making it myself. If I have coupons it is way cheaper.
Does anyone have any good recipes for roadkill?
I used to eat well, high protein, low fat, low carbs, but eating well has become expensive. I have to save for ammo. My co pay on my medicare also leaped this year, went from roughly 40 bucks to 98 bucks. To all the folks that voted for Obozo, may you freeze to death in the dark. As Patton said, May God have mercy on you, I won’t.