Many of you live in an area with high cost of living. Is that something you considered before you moved to a ski area?
Not really all my parents looked for was coming here for all of us was just a better life.
1. How much can someone change the rate of inflation they face by changing what they purchase? Is this a serious overestimation problem with the CPI? Do you time your purchases around sales? Do you change your purchases because of sales?
People can drastically change the rate of inflation they face by changing what they buy because it changes what is rate is more important, they base it off of what people buy and in a way form the perfect basket of goods and services coming from surveying people of what they buy. Normally its hard to to know if there would be a problem with the CPI but its based around what people buy which is what calls for sales and for people to change what they buy when they can get something cheaper.
2. What about the distortion caused by improvements in goods? Do you think that is a serious problem in measurement? Back in the 1970’s my Dad purchased an early calculator. It handled addition, subtraction, multiplication, and division. It cost nearly $100. Phones have a similar challenge as do cars and even airport bathrooms. If your raise last year was 2% and inflation was 2% did you break even? Or did your life improve?
I think it isn’t a good measure only because for some businesses it isn’t something they can control. You pretty much broke even because with that raise the inflation went up so you pay a little more for the things that you buy, so you’re making enough to keep up with the inflation.
Macroeconomics 