Re: CPI Composition
 

Not sure about Bernanke but I believe Greenspan's favorite inflation metric was the implicit price deflator.

Implicit Price Deflator

Re: CPI Composition
 

The price deflator is one of any number of metrics that are helpful in policy decisions, but it is inappropriate for use in automatic cost of living adjustments, eg for Social Security benefit increases. There are too many goods in the GDP basket that irrelevant to retirees standard of living.

Re: CPI Composition
 

DcifrThs,

Interesting discussion. I just have a quick question. Could you point me to where Transportation is stated as 6?

Thanks.

Re: CPI Composition
 

[ QUOTE ]
DcifrThs,

Interesting discussion. I just have a quick question. Could you point me to where Transportation is stated as 6?

Thanks.

[/ QUOTE ]

whoops. yea, that is a glaring mis-cite. transportation is like 17. cars, fuel, parts, insurance etc. is like 7 or 8 or 9 if you add it all up.

anyways, i just thought medical care and recreation being anywhere near each other was funny.

Barron

Re: CPI Composition
 

I'm surprised that Medical Care is that low. Does that include "Health Insurance" that everyone complains they can't pay for?

Also, when it says Medical Care is 6.281%, what is that actually telling us? If I wanted to tell someone that it is that %, how would I explain it?

Re: CPI Composition
 

[ QUOTE ]
I'm surprised that Medical Care is that low.

[/ QUOTE ]

exactly my point. more specifically, that recreation is close to the cost of medical care in contribution!!

i'd like to know the elasticities. that would be interesting since you'dt hink you'd be far more sensitive about your health than your fun but who knows.

Barron

Re: CPI Composition
 

[ QUOTE ]

i'd like to know the elasticities.

[/ QUOTE ]

Is there a way to determine this?

Re: CPI Composition
 

[ QUOTE ]
I'm surprised that Medical Care is that low. Does that include "Health Insurance" that everyone complains they can't pay for?

Also, when it says Medical Care is 6.281%, what is that actually telling us? If I wanted to tell someone that it is that %, how would I explain it?

[/ QUOTE ]

It is just the percentage of the CPI market basket that is spent on health care. It includes direct OOP expenses of the consumer, including insurance premiums, and includes the employer cost of health insurance coverage for the employee. It does not include costs of government administered coverage, eg. Medicaid and Medicare Part A.

As I think you are stating ironically, health insurance is not extremely expensive. If you consider that 6% of CPI expenditures represents a much smaller percentage of total expenditures, and that for those who itemize expenses > 2% of gross income are deductible, health insurance is in reach of anyone who needs it and isnt getting it.

Re: CPI Composition
 

[ QUOTE ]
[ QUOTE ]
I'm surprised that Medical Care is that low. Does that include "Health Insurance" that everyone complains they can't pay for?

Also, when it says Medical Care is 6.281%, what is that actually telling us? If I wanted to tell someone that it is that %, how would I explain it?

[/ QUOTE ]

It is just the percentage of the CPI market basket that is spent on health care. It includes direct OOP expenses of the consumer, including insurance premiums, and includes the employer cost of health insurance coverage for the employee. It does not include costs of government administered coverage, eg. Medicaid and Medicare Part A.

[/ QUOTE ]

How would I explain it to someone who has no idea about these kinds of statistics, or what the CPI even is? Basically, my girlfriend is in medical school and she is very interested in health care reform. I think this statistic is very interesting and I want to tell her about it, but in a form that she can understand.

Re: CPI Composition
 

[ QUOTE ]

As I think you are stating ironically, health insurance is not extremely expensive. If you consider that 6% of CPI expenditures represents a much smaller percentage of total expenditures, and that for those who itemize expenses > 2% of gross income are deductible, health insurance is in reach of anyone who needs it and isnt getting it.

[/ QUOTE ]

I got to you too quick, but you bring up a good point. I'm having trouble understanding what you are saying because I don't think I'm understanding economics at the same level that you are. However you say that "health insurance is in reach of anyone who needs it and isn't getting it." Why then do people say they can't afford health insurance?