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To: Ilaine who wrote (66559)2/10/2001 8:30:30 AM
From: flatsville  Read Replies (1) of 436258
 
The source I linked is the full text of the report.

The source you linked does not state that the Boskin Commission recommended using hedonic pricing.

Uh, then what adjustments to CPI do you think they were talking about?

Perhaps you need to reread the entire report for greater understand and some background material on the commission and hearings as well. (I have. It was clear to me what the intent was.)

The sea change toward a "downward" bias is in there. It may not be obvious. What were they suppose to say, "The intent of this Commission is to screw old people through the use of hedonics. Be advised?"

The Boskin Commission Report

The Advisory Commission To Study The Consumer Price Index (aka The Boskin Commission) was appointed by the Senate Finance Committee to study the role of the CPI in government benefit programs and to make recommendations for any needed changes in the CPI. The Commission's December 1996 report recommended downward adjustments in the CPI of 1.1%. The CPI is the basis for Social Security COLAs and this recommendation, if adopted, would reduce future Social Security COLA increases, as well as impact numerous other government programs.

It states that the BLS already was using hedonic pricing:

Yes and that was the method favored by the Boskin Commission. They note the other four methods have the potential to create an "upward" bias which was what they were trying to avoid re: CPI.

This list of BLS methods reveals at least four potential sources of upward bias: the use of the direct comparison method that does not address the quality issue at all, the use of the deletion method that bases price change on models that are unchanged in quality and may be further along in the product cycle, the use of the linking method when quality improvements are greater than the price differential across models, and the use of the cost method which may miss quality improvements achieved by those firms which supply better materials and inputs to producers of final goods.

So what is your point? That it wasn't layed out in one simple neat sentence?
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