[DcifrThs]

thanks for the post. i didn't google hedonics until you posted.

seems like two prominent (and likely other) economists favored one system of calculation of CPI and there was a debate on which to use. finally, they adopted one that understates rather than overstates inflation.

i don't see the huge problem with this since it was done out in the open. especially since you can then argue that until it was done, the government was paying too much. now it is paying too little.

overall, i'm sure the reduction in payments past and future will far outweigh the overpayment made from inception to 1999.

but that will take a loonngngg time to occur in reality since i think CPI was used as the base until 8 years ago. i have to look into that.

there will always be people that cry conspiracy on either side. what do you think could have been said before they made the change? what about the poor taxpayers who are sponsoring those who invested in TIPS. inefficiencies will always arise, but it seems the decision was made fairly and in the open. if put up to the voters, obviously it would remain to be overstated.

you can never get something like this 100% correct so you have to choose your error. is it surprising that the government, whose interests are best served by understated inflation, to choose to understate rather than keep overstating?

ideally, it would be variable, but that would cost a ton more to administer.

anyways, i think you brought up a great issue and helped me understand where the change was made and why. now ig otta look into the cost to the government above "actual" inflation since inception of CPI to 1999.

Barron