The prices would ideally come from a large number of sources and some averaging would take place.
[0] https://www.advisorperspectives.com/dshort/updates/2021/07/1...
[0] https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...
What makes you think a NGO would do a better job? On one hand they might not have the same incentive to manipulate the numbers in the same way that the government would, but that would be replaced with an incentive to come up with whatever numbers that their donor base would like to see (see also: media companies adjusting their coverage to retain subscribers).
>If you look at the constituents [0], housing, education and health care make up around 60%, so it makes no sense that inflation has been flat for the last ten years.
Are you missing a part of your argument here? You just say that a few categories make up 60% of the CPI, then immediately conclude that "it makes no sense that inflation has been flat".
>The prices would ideally come from a large number of sources and some averaging would take place.
The problem is that you need to do various subjective adjustments (eg. the controversial "hedonistic adjustments") for the numbers to make sense.
Maybe they wouldn't do better, but they wouldn't have a trillion dollar incentive and ideally there'd be competing metrics.
> Are you missing a part of your argument here? You just say that a few categories make up 60% of the CPI, then immediately conclude that "it makes no sense that inflation has been flat".
In the US, over the last 10 years housing, education and health care have grown by a lot while official inflation has been historically very flat (0 - 2%).
Health care: On a per capita basis, health spending has increased over 31-fold in the last four decades, from $353 per person in 1970 to $11,582 in 2019. [0]
Housing: Median home price was around ~210k in today's dollars ten years ago and is now ~314k [1]
Education: The cost of college increased by more than 25% in the last 10 years [2]
> The problem is that you need to do various subjective adjustments
Sure, but again, I don't trust the officials to do this given the trillion dollar incentive to fudge the numbers.
[0] https://www.healthsystemtracker.org/chart-collection/u-s-spe....
[1] https://dqydj.com/historical-home-prices/
[2] https://www.cnbc.com/2019/12/13/cost-of-college-increased-by...
The fact that no private entities tried to do anything similar (eg. bloomberg, s&p, msci) despite the massive incentive to do so (it's hard to price bonds/mortgages/loans if you can't trust the inflation numbers), suggests that the current number is already pretty good and/or that coming up with comparable numbers would be massively expensive. I think the problem is of expectations. You want a competitor to the BBC. You hope that it'll be something like propublica, but given the crowd associated with crypto, you'll probably end up with something like zerohedge.
>Health care: On a per capita basis, health spending has increased over 31-fold in the last four decades, from $353 per person in 1970 to $11,582 in 2019. [0]
That seems pretty consistent with the figures from CPI: https://fred.stlouisfed.org/series/CUSR0000SAM2
From 1999 to 2019, the source you gave (Total national health expenditures, US $ per capita) 154% increase. The "Medical Care Services" component of the CPI grew by 112% in the same time period. The figure you gave also doesn't account for an aging population (older people spend more on healthcare, irrespective of cost), so the "true" difference is probably smaller.
>Housing: Median home price was around ~210k in today's dollars ten years ago and is now ~314k [1]
Because looking at home prices is a poor way of assessing housing cost increases. If you factor in falling interest rates, the cost of a house has actually gone down. Houses have also gotten bigger and better equipped in the last few decades, which might increase the overall sticker price, but arguably shouldn't contribute to CPI increase.
see: https://awealthofcommonsense.com/2021/03/what-if-housing-pri...
>Education: The cost of college increased by more than 25% in the last 10 years [2]
The "Tuition, Other School Fees, and Childcare" component of the CPI has increased 37.4% in the same time period.
> That seems pretty consistent with the figures from CPI:
CPI 1970: 31.1 CPI 2021: 570.6 Increase: 570/31 = 18-fold compared to 31-fold. Don't just say "looks similar" when you could do simple division and realize it's not similar. I don't think there is a single economist that would argue that health care spending has not grown considerably faster than the rate of inflation.
Here's the continuously compounded rate of growth of health expenditures as per the st louis fed
DATE HLTHSCEXPHCSA_CCH
1/1/01 8.61255
1/1/02 8.53011
1/1/03 6.8683
1/1/04 7.1269
1/1/05 6.22677
1/1/06 6.17762
1/1/07 6.12021
1/1/08 4.61058
1/1/09 4.60561
1/1/10 3.86769
1/1/11 3.5515
1/1/12 3.53598
1/1/13 2.54628
1/1/14 5.1474
1/1/15 6.26148
1/1/16 5.01743
1/1/17 3.98121
1/1/18 4.16224
You can do the same for housing [1]
1. you're thinking that the index would have to be integrated into the product itself (eg. this bond pays s&p inflation index + 2%) for it to be useful. This isn't the case. Even for forecasting or internal rate-setting purposes it would be massively useful.
2. If you check the website for s&p or msci, they got an endless list of indexes. Some of them are even integrated into financial products (eg. tracked by ETF or derivatives). Exotic indexes is definitely not a problem for them.
>I don't think there is a single economist that would argue that health care spending has not grown considerably faster than the rate of inflation.
I think the problem here is that you're conflating per-capita spending with price increase. As mentioned earlier an aging population would increase per-capita spending without necessarily increasing price. People opting to buy better, but more expensive care would also increase per-capita spending without necessarily increasing price.
>You can do the same for housing [1]
What's your contradictory source for the actual price of housing?
Once done, it could be useful to make an oracle with it and put it on ethereum so it can be used by other smart contracts. But not the calculation itself nor the original data points
[1] https://en.m.wikipedia.org/wiki/MIT_Billion_Prices_project
[2] https://www.hbs.edu/faculty/Pages/item.aspx?num=54491
[3] https://en.m.wikipedia.org/wiki/Cristina_Fernández_de_Kirchn...