Timba I wanted to compare a chicken to a chicken, a ton of copper to a ton of copper, and a pound of sifted flour to a pound of sifted flour.
I quoted you exactly twice. I even graciously offered to let you take this statement back:
If one bought the cheapest new Ford offered by a dealer today and bought the cheapest new Ford offered by a dealer 30 years ago and if we assume the same level of bargaining skills, what one would be getting is comparable enough to measure the change in the price of a new Ford. No hedonics, no nonsense. Keep the value of the Dollar constant and see what the comparison is.
I was the one that said a car was not a car and a house was not a house. You finally agreed with me (or so I thought) when you stated ....
The correct comparison in this case is not your dad's house to my house or your house. The correct comparison is your dad's house now versus what he paid for it. I'm sure there is still a market for 700 SqFt houses, albeit a smaller market now then back then. The difference in market appeal is known as functional obsolescence but the Market would account for that without any brainiac trying to add hedonic "improvement" to the equation.
At least so I thought. A house is not a house and I said that all along. I SAID THAT ALL ALONG.
My observations about windows and granite and home size make perfect sense. One simply can not look at average or median home prices when there are too many variables to consider. I have all along wanted to keep things constant. You are the one that has been fighting me and your first statement in bold proves it.
I am quite willing to give you the inflation on my dad's house over the last 20 years. Zero. There you have it. Now I freely admit that Danville is not the typical case. Nor is a 700 sq ft home the typical home. In many places in fact it would be razed as totally worthless. Negative 100% inflation or if you prefer positive 100% deflation.
I would have thought were were in agreement but I have not changed my stance one bit. A house is not a house and a car is not a car, but a 3 lb chicken is a 3 lb chicken. My point about houses is that people cite median prices as if median prices rising proves inflation. It does not prove anything unless one is comparing exact equivalents. I will say it again, one has to compare exact equivalents, and I do not care if that is houses, cars, or chickens.
The cheapest Ford of 30 years ago simply is not comparble to the cheapest Ford today. That is simply a statement of fact. Given that those cars are not comparable it does not make sense to compare prices of a car today with a 1974 Ford, nor does it make any sense to compare the price of a 1974 Ford with a 1924 Ford and it certainly makes zero sense to compare a 2004 Ford with a 1924 Ford, anymore than it makes sense to compare vinyl windows to Loewen windows or a random 2400 sq ft home built 20 years ago to a random 2400 sq ft home built today.
Todays cars have power anti-lock brakes, seat belts, air conditioning, AM/FM CD players, intermittent wipers, reduced emmisions, better fuel economy, air bags, fuel injection, quick start, keyless entry, etc etc etc. You act as if there is zero cost to that. There is a lot more aluminum, copper, rubber, and glass in today's cars. The commodity prices alone should tell you that the car should cost more. If you believe that statment you made in bold (I thought you discared it but perhaps I am wrong), then your expectation is that commodities should have negative inflation because there sure is a heck of a lot more raw materials in today's car than one from 1924.
If you believe the statement above as I quoted you, not only do you want to discount quality improvemnts you also want to discount the enormous increase in material components that go into today's cars.
Mish
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