Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: KyrosL who wrote (16527)	3/7/2002 7:48:31 PM
From: JBTFD	Read Replies (1) of 74559

The thing that bothers me the most about the hedonic methods is that they dont publish the un-tampered with numbers, and it is very difficult to find out what their methodology is or assumptions are when they tamper with the numbers. And considering that in fiscal 1998 $500 Billion of federal government spending was linked to price changes measured by the CPI, I would say there is a huge incentive to understate CPI. If you wanted to invent a pill that would magically allow us to overstate production and to understate inflation, that pill would be called hedonics. According to the inflation calculator $1000 in 1990 would have the spending power of $1355.01 today. Where I live that doesnt even keep up with the increase in housing costs. I dont get how you can think it is understated.

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