coloradoatheist
Veteran Member
And even if you asked "What's the price of 19" TVs?" it's still hard to answer. The new version has a better picture which has to be worth something, the new version uses less power--you have to adjust the costs for the power they use to compare them fairly (and how many hours will it be on??), the new version takes less space--and housing space is expensive.
Once again, the CPI measures the price of the TVs that people are buying. It doesn't delve into the subjective questions of utility. It doesn't maintain obsolete 19" CRT TVs because people aren't buying them. But they still buy TVs. People decide the utility of TVs and it is reflected in the number and prices of the TVs that they buy. And that is reflected in the CPI, as it should be.
If people need more room because of a change in TV viewing it will be reflected in the cost of housing that they live in, say that they want a media room. (The CPI don't include home price, it accounts for housing costs by including rent in the index. Rent does track home values but it is dampened over time, it is not as volatile over time.)
And the issue is that a 30 inch TV is better than a 15 inch TV. So if a 30 inch TV and a 15 inch TV are the same price, it underestimated deflation.