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To: GraceZ who wrote (58637)	1/17/2001 1:17:24 PM
From: LLCF	Read Replies (2) \| Respond to of 436258

<You have to admit the computer example is a stunning example of how some things are getting magnitudes better and cheaper at the same time. How do you account for that when measuring output, you can't simply ignore it, can you? It's not just buying computers outright, it's how they are used in producing goods. If you look at furniture now you can see how they are using CAM to produce effects with wood that only a highly skilled craftsmen could produce in the past. Inexpensive furniture is magnitudes better than stuff from ten years ago. > Grace... on the computer issue... with the new better faster computers they are NOT ignored without hedonic pricing. If a worker is faster, produces more, more cost effectively etc. one can lay off other workers, or increase output with no additional workers etc. Your furniture example is a good one, many less craftsmen needed! No one is saying that computers aren't better AND cheaper... but they don't increase productivity unless they allow one to produce more, or cheaper right? DAK

To: GraceZ who wrote (58637)	1/17/2001 1:17:41 PM
From: Les H	Read Replies (2) \| Respond to of 436258

Can't really measure subjective term as "better car". Have people suddenly started keeping their cars for a much longer period. Given the trend toward leasing, I think not. If anything, much of its value is being lost through depreciation or shows up as profit to the lessor as a higher resale price. The general idea is that the basket of goods is considerably different over time, and using hedonics to dummy down the price of acquiring those goods cheats lendors, savers, and pensioners. Considering that the price of a car according to the BLS has grown 38% in over ten years should be an obvious enough example.