CD Player Dropped From Inflation Data, Phonograph Next?

from the neverending-treadmill dept

In the UK, the Office of National Statistics has decided to remove the personal CD player from the basket of goods which make up the RPI, the equivalent of our CPI, a measure of inflation. Nobody buys them anymore, the thinking goes, so the more popular and expensive mp3 player has replaced it. In the US, the Bureau of Labor Statistics, often make similar decisions. But does this make sense? Measures of inflation, when placed against wage measures, are supposed to indicate whether consumers are getting ahead. If prices go up, while wages stagnate, then that's a sign of trouble. Now, the reason that consumers buy mp3 players, and not CD players, is that they're better quality and a better deal. Or, put another way, consumers could still buy a high-quality CD player, and save a lot of cash for later. Either way they benefit. But, inflation data doesn't reflect this, it only notes that mp3 players are more expensive and thus the basket of consumer goods doesn't seem to go down in price. It seems that intellectual property isn't the only area in which the government has failed to adapt to new technology. Economic measurements need to show that consumers benefit from the rapid obsolescence and constant price deflation that marks the high-tech world.

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  1. identicon
    Topher3105, 20 Mar 2006 @ 8:52am

    I don't get inflation period?

    Why do things have to increase in price at all?

    I mean, lets say we drop inflation, and everything is fixed in price as is today. Why should the fact that people get raises and pay increases cause the price of products to increase? Doesn't this mean that people will just buy more products thus making the companies selling these products richer?

    Intead, it seems that everytime I get a wage increase, taxes go up, the cost of living goes up, the cost of homes and cars go up, I don't ever seem to get ahead, so the net effect is that I am making the same (if not less) net profit year after year.

    Inflation also causes the poverty line to increase, as people who don't have a decent income or yearly wage hikes find it more and more impossible to make ends meet.

    I think inflation just some artificial occurance that justifies economics as a valid thing, and not just a science of statistics for meaningless things.

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