How is the CPI calculated and whats wrong with it?
• The offical government CPI FAQ on how its calculated, etc. • Some of the issues we have with it under stating what is actually happening and the way its incorrectly calculated are: • It is frequently incorrectly called or promoted or understood as a cost-of-living index, and was not designed for that purpose. • Most taxes are not included. • Substitutions are done when something goes up. If beef goes up and chicken doesn’t for example, chicken prices are used instead of beef prices. • On housing prices, something called “homeowners equivalent rent” is used even though over 2/3 of the people in the US live in a non-rented home, so any large increases in housing prices are not included. • On cars, used car prices are used instead of new car prices. • It does not attempt to measure a standard of living. • It does not address many changes in health care, quality changes in products included, water and air quality, crime levels, consumer safety, or educational quality to name a few. • Pol
