Keep in mind that CPI is an average based on what people actually pay, which often lags market rate.
For housing, you might not pay market rate due to having bought a house long ago, or rent control, or some other way of getting a sweetheart deal.
For housing, you might not pay market rate due to having bought a house long ago, or rent control, or some other way of getting a sweetheart deal.
I also have a pet theory that CPI understates the cost of housing due to people who are pushed out of entering the market altogether (e.g. homelessness rising, people living with parents longer)
Sort of the same way some people say unemployment figures understate the true number by ignoring discouraged workers / people who have stopped looking altogether. I have a hunch there are many discouraged folks who have stopped looking for housing altogether.
CPI is broken because it doesn't factor in a "change in taste or prefence"
CPI treats individuals as a giant unmovimg population mean.
To counter they change to use vector fields.
If you look at the Bureau of Labor and Statistics they will happily provide you with more detail, for instance the median salary in a field for the top 10% of employees versus the top 90%.
I don't know how you'd keep that updated though, you can hardly say "the amount the richest 10% spend is the rich CPI" because it's a silly statistic. I don't know how you can reasonably say "the minimum amount required to be rich", it just seems silly on its face.
No, I don't think there's much of a way to make it work. It's probably more directly useful to understand whether people are saving money or how much debt they have, though that's going to lag.
I mean, or just ask people. The government is fairly good at doing that.
For income once again you can turn to IRS tax return data. I believe IRS can also sum your accounts as well as review transaction history. Creditors also report debts to IRS.
All told I believe the federal government can access all the information needed to know exactly what almost every American is paying for housing, how much they are being paid, how much they are spending, and how much debt they have.
> Generally, owners' equivalent rent is obtained through surveys asking homeowners the following question: "If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?" [2]
I would guess that some owners’ ideas of what their house would rent for might lag the market?
[1] https://carcinisation.com/2020/12/11/survey-chicken/
[2] https://www.investopedia.com/terms/o/owners-equivalent-rent....