If you buy groceries, you’ve no doubt noticed that package sizes have gotten smaller over the past few years. Cereal boxes are thinner than they used to be. Bags of potato chips have more air and less food. Just last week, I went to Trader Joe’s to buy a box of my favorite snack bars, and I discovered that the same box that used to have 6 bars now has only 5.
It’s no mystery why this is happening. Food costs are rising, but food producers don’t want to raise prices, so they’re keeping the prices steady, and giving you less for your money. It’s kind of a hidden form of inflation, because grocery bills are going up, even if prices aren’t. Has anyone attempted to calculate the cost of this “hidden inflation”? Better yet, has anyone attempted to translate this into an “effective inflation rate” for the last few years, that takes into account the fact that people are getting less for their money, and have to either buy more packages, or shop more frequently?
I would expect anybody serious about measuring inflation is going to control for changes in package size when they develop and maintain their “basket of goods and services”: rather than just tracking ‘box of snack bars’ in the basket, they’re going to track the price of a certain weight or volume of the product.
Thus, I suspect that this hidden inflation isn’t really so hidden.
Try shadowstats.com. It uses alternative methodolgy for CPI, infaltion etc. I con’t really vouch for the accuracy of the info, but it is a relatively well known place.
No serious economists consider this site to be credible. It is a political action and in my sector it is considered very naive to look to american statistics from this source.
Oh, don’t think my mention of it is an endorsement(I may not have put appropriate emphasis on that point). I was just saying it is something that deals with the OP’s issue to some degree, even if only in a tangential way.
Really when I think about it, I can only recollect it ever been mentioned or used by people who have economic opinions or analysis I don’t agree with. I’ve never used it myself as a source or been sufficiently motivated to delve into the methodological approach they use.
But anyway, while we’re here, what are the most glaring weaknesses of shodowstats?
The fact they don’t match reality. If their numbers are to be believed, we’ve been in a recession (in GDP terms) for the last 25-30 years. I guess a debate is possible by digging into the details of their methods, but niggling at details seems pointless when they’re ludicrously wrong on something like that.
Their “alternate” consumer price index calculation has to be wrong. They decry the “official” numbers, but the problem is that the government numbers have never been that far off reality, at least by comparing to independent measures. Probably the best known is MIT’s Billion Price Project. They use the internet to track prices for a billion goods over time. While not exactly the same, that estimate of inflation roughly tracks the government’s numbers, showing that the government isn’t fudging the numbers.
That’s not to say some government’s don’t. Currently on their page, they’ve got an analysis of Argentina, where their measure shows a consistently higher level of inflation than that government is reporting.
While some people (including the people at shadowstats) level the same charge at the US, the data doesn’t really support it.
As you can read in the links, they are simply applying an ‘adjustment’ to the US government statistics, not recalculating according to some past methology, although this is the argued excuse.
This is politics and not economic statistics.
Many economic sources of all kinds of politics have noted it is nonsensical.
Technically, yes - e.g., they adjust for 14-ounce “one pound cans” of things. I think there are more subtle influences on consumer choice and buying, even taking into account this strictly numerical adjustment and some buyer savvy about “shelf realities.”
I think it’s reasonable to say that no change in a consumer product’s packaging is ever for the benefit of the consumer, no matter how large “Convenience!” and “Improved!” and so forth is stamped on it.
Well, maybe, but that wouldn’t mean the change in per unit price is different from inflation measures from various sources.
It may mean people are unwittingly buying more or less of something, but that’s not inflation, hidden or otherwise, either.
Taking this back to the OP, changes in package sizes will have, at best, a modest effect on inflation. I’d actually wonder more about the effect of the internet and increased convenience in the modern age on cost savings (and whether this leads to increased spending as a result).