It's surprising how much you discount something you don't take the time to understand. Clearly your single set of experiences is superior to the century of work by thousands of professionals, probably all with far more knowledge in this area.
You should start your One True CPI and license it; you'd be rich.
I took a few seconds to understand why the 6th riot was used; it's clearly correct and if you took a moment to understand instead of discounting it, youd learn. Hint: it's 6 things multiplied together - ever hear of geometric means? Similarly I looked at the paper you discounted because the degrees of freedom somehow offended you. It too is a good model. And, as credentials go, I have a PhD and decades of modeling experience. Even so, I'd expect someone with your claimed expertise to be able to understand these.
If there were some vastly better method, traders could make money on the difference. They look at it, and cannot. There's lots of papers and research on this.
Multiple other actors,like the MIT Billion Prices project started, and others followed, measure it, and get equivalent numbers.
So, if you're so sure the BLS is stupid and wrong, there should be some group getting it right. Care to find them?
Another simple experiment you can do (and I've done) is to take a reasonable set of monthly purchases, weight costs like that, go back 40 - 50 years, and pull up ads for those goods. Pop it all in excel, and compute compound inflation over that time. Do it honestly. Then check BLS over that time. TADA! Guess what? It's pretty good. I've even gotten several friends to do this when they claim all this nonsense. They've all been surprised how well it works.
> Clearly your single set of experiences is superior to the century of work by thousands of professionals, probably all with far more knowledge in this area.
You're behaving like I am alone in criticizing the BLS for this insane methodology. There are countless papers out there about how crazy the CPI is, and specifically CPI Housing.
> You should start your One True CPI and license it; you'd be rich.
Predicting CPI and corrections to it is an established enterprise. As is predicting better inflation numbers.
> Multiple other actors,like the MIT Billion Prices project started, and others followed, measure it, and get equivalent numbers.
We're talking about housing yet you're quoting a project that specifically excludes all housing? How is this relevant? Why do I feel like you haven't read their paper?
They very explicitly show that their benchmark doesn't work outside of goods. Like they look at medical costs and show that they aren't predicted well. Sadly they don't look at housing. The project also ran at a time of very low inflation in the US so there's not much to see. It's easy to have agreement with CPI when the numbers are all fairly low, not much room to disagree at all. We can also argue how much agreement their numbers actually have with CPI.
> I took a few seconds to understand why the 6th riot was used; it's clearly correct and if you took a moment to understand instead of discounting it, youd learn. Hint: it's 6 things multiplied together - ever hear of geometric means?
Ok, I was having fun at that point. But, let's be serious. It's still stupid. And I stand by my statement, never in my life would I take a geometric mean here.
You're telling me that you would do this today? You wouldn't say set up an actual Bayesian model and compute its posterior to estimate all of these quantities? You would compute all of these indices and corrections separately? All of these little errors add up, you have no idea what's going on with them. You wouldn't want to get some confidence interval out? You wouldn't want to be able to see how variations in your assumptions can change the results? You would impute the missing numbers with whatever felt good? Come on. This isn't acceptable methodology in any field that I've ever been a part of.
> Similarly I looked at the paper you discounted because the degrees of freedom somehow offended you. It too is a good model. And, as credentials go, I have a PhD and decades of modeling experience. Even so, I'd expect someone with your claimed expertise to be able to understand these.
You're telling me that the best you can think of model wise is a linear country-wide model with an R^2 of 0.5? After decades of modeling experience that's all you've got? And that one R^2 is enough to make you believe this is a good model? That's the standard of evidence you use before you commit trillions of dollars to a model? Give me a break! This is the initial analysis an undergrad would make in a mediocre course project they didn't put much effort into. Even our undergrad courses have far higher standards than that paper.
You should start your One True CPI and license it; you'd be rich.
I took a few seconds to understand why the 6th riot was used; it's clearly correct and if you took a moment to understand instead of discounting it, youd learn. Hint: it's 6 things multiplied together - ever hear of geometric means? Similarly I looked at the paper you discounted because the degrees of freedom somehow offended you. It too is a good model. And, as credentials go, I have a PhD and decades of modeling experience. Even so, I'd expect someone with your claimed expertise to be able to understand these.
If there were some vastly better method, traders could make money on the difference. They look at it, and cannot. There's lots of papers and research on this.
Multiple other actors,like the MIT Billion Prices project started, and others followed, measure it, and get equivalent numbers.
So, if you're so sure the BLS is stupid and wrong, there should be some group getting it right. Care to find them?
Another simple experiment you can do (and I've done) is to take a reasonable set of monthly purchases, weight costs like that, go back 40 - 50 years, and pull up ads for those goods. Pop it all in excel, and compute compound inflation over that time. Do it honestly. Then check BLS over that time. TADA! Guess what? It's pretty good. I've even gotten several friends to do this when they claim all this nonsense. They've all been surprised how well it works.
So simply check it. It's easy.