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Comment by michaelt | Hacker News Reader

We've also seen a lot of "shadow inflation" in my country.

Pre-Covid I could send a parcel with two-day delivery for $X or next-day delivery for $1.5X

Now, I can still buy "next-day delivery" for $1.5X but the parcel takes two days to arrive. On paper, the service's price hasn't changed - but in reality, it's 50% more expensive.

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Yes, this is an unspoken facet of inflation it seems. Many goods are both increasing in price and decreasing in quality or quantity. You're getting less for your money, but only the price increases are counted.

I'm curious if economists have a formal study of this.

I assume that decreases in services will create decreases in goods. So GDP and CPI will reflect this.

I've seen at least some of this effect covered by the term "shrinkflation", basically the concept of companies reducing quantities rather than increasing prices.

Customers tend to be most sensitive to price changes, so we'll probably see more and more of these non-price inflation changes.

The CPI does have formal methods for attempting to account for this:

https://www.bls.gov/cpi/quality-adjustment/questions-and-ans...

This can occasionally result in odd things, like when the introduction of unlimited cell phone data plans led core inflation to drop one month for first time in seven years:

https://www.wsj.com/articles/BL-REB-37505

This is similar to a concept called 'Shrinkflation' https://en.wikipedia.org/wiki/Shrinkflation

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