Many things have also gained in quality substantially, such as vehicles, electronics, and durable goods. A new car not only lasts longer and requires less maintenance, is more fuel efficient, safer, but is often loaded with amenities like navigation, entertainment, self-driving. How do you make an equivalency to something from the 90s?
Meanwhile digital content and communication services have become free and ubiquitous. Free goods don't get priced at all. This means some categories may have lower than headline inflation. Can you imagine what a pre-internet era company would have been able to charge for an Amazon Echo style device that played any song you asked it to, controlled your home and estimated your drive time? Amazon practically gives them away for free. You don't even have to pay for Prime.
Moreover, the healthcare plan that many people's employers buy on their behalf has accounted for a growing portion of overall compensation. Healthcare in US is so distorted that it barely has a measurable signal for price/service, and yet in the US it consumes 1/6 of GDP. Since many people's employers pay for this, it doesn't factor into the consumer price index.
College tuition? It's up 2-5X in the past 20 years. Fine, we can measure the cost of tuition increases, but does it take into account the interest payments on the student loan debt that, for some, exceed the original loan by a factor of 5-10X? (I don't actually know).
This is just to agree that measuring inflation is really tricky, especially in an age of accelerating technological advancement and institutional failure.
Cars are really the best example but hard to tell because the change over time is so not so sudden.
My first car was 1988 Pontiac Sunbird from my parents. Inflation adjusted price is 26,000 in 2021 dollars.
I had one of the cooler cars in high school. If you look up a picture of it now, it is such a piece of shit I literally would not get in one.
Everyone complains about education cost but I take whatever classes I want online for free from some of the best Universities to have ever existed.
There is always someone that says this obviously ludicrously over simplistic statement that inflation is money printing and then cherry picks data that backs that up. Even though it is just as easy to cherry pick data that shows that point is stupid.
We can't measure "inflation" in the general sense because we have no definition of what that even really means.
> College tuition? It's up 2-5X in the past 20 years.
This isn't going to be a popular take, and I have no love lost for Academia (see my post history). But...
College tuition has the same effect as vehicles: they've gotten more expensive over time, but the quality of the product has massively improved from a consumer's perspective.
1. Education: students have way more support now than they did 20 years ago, or especially 40 years ago. It's quite hard to over-state how much more support students are given today. This is especially true at places with higher tuition, such as LACs or elite universities. It's REALLY HARD to not make it through a four year degree these days, and failure modes typically involve some sort of violent crime or substance abuse disorder. And that's true even for canonically hard fields. With a small handful of exceptions, "weeder courses" don't really exist anymore. And even where they do, there's considerable hand-holding.
2. Housing: dorms these days are still way over-priced relative to what you can get in the private market, but quite nice compared to what was available 30+ years ago.
3. Amenities. This is probably the largest. Students have access to world-class gym facilities -- the type that you can't even buy outside of large cities. Rock walls, huge pools, full weight lifting gyms, yoga studios, squash courts, tennis courts, cheap/free fitness classes, etc. all within a 5 minute walk of your bed.
A lot of the increase in the price of college is attributable to the product becoming much "better" -- it's never been easier to get a degree and dorm list has never been more comfortable.
The music point is very true. Used to be that a CD had 10 songs on it and sold for between ten and twenty dollars. Now for $10 a month for Spotify or YouTube music you can stream literally thousands of songs a month.
Another one is mobile phone service. Does any remember pay-per-text plans? My phone bill has been more or less than same for a decade, but I now have unlimited call, text, and data.
Meanwhile digital content and communication services have become free and ubiquitous. Free goods don't get priced at all. This means some categories may have lower than headline inflation. Can you imagine what a pre-internet era company would have been able to charge for an Amazon Echo style device that played any song you asked it to, controlled your home and estimated your drive time? Amazon practically gives them away for free. You don't even have to pay for Prime.
Moreover, the healthcare plan that many people's employers buy on their behalf has accounted for a growing portion of overall compensation. Healthcare in US is so distorted that it barely has a measurable signal for price/service, and yet in the US it consumes 1/6 of GDP. Since many people's employers pay for this, it doesn't factor into the consumer price index.
College tuition? It's up 2-5X in the past 20 years. Fine, we can measure the cost of tuition increases, but does it take into account the interest payments on the student loan debt that, for some, exceed the original loan by a factor of 5-10X? (I don't actually know).
This is just to agree that measuring inflation is really tricky, especially in an age of accelerating technological advancement and institutional failure.