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To: Don Lloyd who wrote (88430)	4/1/2001 3:15:35 PM
From: Ilaine	Respond to of 436258

The measurement problems are almost insurmountable because over time what is consumed changes so dramatically. How to compare today's consumption of jeans and sweats and running shoes to yesteryear's consumption of woolen clothing and button-up shoes? It might be interesting to compare the prices of a market basket filled with nothing but items which have been around for a very long time, e.g., a bar of Ivory soap, a bottle of Bayer aspirin, a bottle of Coca-cola, a box of Kellogg's corn flakes, a gallon of milk, a dozen eggs, a pair of BVDs, and so on. That should be relatively easy to do. The hard part comes when you try to measure the prices of things that are demonstrably improved over time, e.g., how do you compare the price of a Lexus with that of a Model-T? Greenspan's musings about comparing the price of surgical procedures over time is interesting - how much does it cost to have gallstones "removed" using lithotripsy (shockwaves pound the stones into smithereens), an outpatient procedure, vs. having your gallbladder removed via the old way of opening you up which required several days recuperation in the hospital, not to mention the cost of surgery, which isn't just the surgeon's bill but also the anesthesiologist, a lot of nurses, a lot of equipment, and painkilling drugs for afterwards. Or the price of opening up an artery using a stent vs. open heart surgery. It may not increase the aggregate in GDP but the increase in the standard of living is obvious, and the consumer is free to spend the money saved on other goods. The doctors and nurses and hospitals, in the meantime, seem to always find something to do, like taking care of old people so they live longer. Which means that granny is around to help with the baby sitting, so mama can get a job and buy the household a Lexus.-g- Or pay for the kids to go to college.