The problem with the chart is if you adjust for quality, value for money in health care delivery has improved.
People are more overweight, less active and still live longer (in Australia). Some of this is less smoking. But some of it is better quality health care.
The options for diabetics, with metformin, ozempic etc. are game changing.
Glad you have better quality health care in Australia. More medication doesn’t necessarily mean better quality. Heck you had the covid vaccines and I would question if that was better quality.
Also quality of life needs to be factored in like you alluded to. Overweight, out of shape and dying a longer sedentary life may not be the best option.
A great dilemma indeed... My intuition tells me to use what's most suited for a given problem under investigation. For example, if I was measuring "how much it cost to acquire a TV set now as compare to X years in the past", I would pick 0% inflation. Of course I could use secondary measure, like my income now and then to get additional "feel" for how big burden the purchase was for the household, now and then. For "progress related" analysis, quality adjusted measure is more suited. All in all, you have to pick the methodology which is better suited for what you are investigating.
Personally, I always prefer simple measures - so, nominal prices. CPI, median household income, etc. measures appear to be simple (and easy to obtain!) but they are really loaded with lots of assumptions which may not help in analysis of a specific phenomenon.
What I would like to see is using the hierarchy of needs put into CPI. Food, shelter & clothing being the greatest proportion. Probably is but too lazy to check 😆. I know prices per ounce have gone up considerably more than what the chart shows. Smaller boxes and less weight for higher prices. Although materials and resources for the most part have been stable or even lower in some cases (not lithium or fertilizers) but steel, wheat, corn, etc. I believe have been relatively stable. Farmers can produce more with technological improvements but equipment costs and fuel are higher. Don’t know why I am rambling on so I will stop with the disjointed thoughts.
In dollar denominated real price terms it fell - same nominal price, more features.
In real price terms in use and utility it rose - again use and utility of additional features.
That's why saying 'real' terms, it is not always clear if you just mean 'adjusted for inflation' aka nominal minus inflation or real in the terms of use.
It goes to show the language taxonomy of the economics 'industry' has competing, contradictory and inconsistent use of terms compared to everyday (English) language.
So can your question be sensibly answered? It all depends on your perspective of the word 'real'. My answer is Yes.
To which I guess I would add, this is the whole point and often excessively overlooked Production Possibility Frontier (PPF) to make things more useful (or efficient in use terms).
Slight wrinkle: quite often, lower quality, older goods can be purchased at discounted prices as stores retain stock or discounters buy old stock from boutique stores - especially online discounters.
Then there are second hand marketplaces like eBay & Facebook marketplace. By virtue of being available for sale in the face of the latest stock they can see very large falls in price.
That $2 CRT tv?
It can be found in an op shop for around that! You probably know a senior friend who bought a new LCD and is giving away their CRT!
Nice post, but was disappointed when I realised your table wasn't about actual Kangaroos and Koalas.
The problem with the chart is if you adjust for quality, value for money in health care delivery has improved.
People are more overweight, less active and still live longer (in Australia). Some of this is less smoking. But some of it is better quality health care.
The options for diabetics, with metformin, ozempic etc. are game changing.
Glad you have better quality health care in Australia. More medication doesn’t necessarily mean better quality. Heck you had the covid vaccines and I would question if that was better quality.
Also quality of life needs to be factored in like you alluded to. Overweight, out of shape and dying a longer sedentary life may not be the best option.
Often less medication means better quality.
We used to treat cervical cancer with things like chemotherapy and radiation treatment. We now give HPV vaccines.
For at risk populations covid vaccines are both cheaper and more effective than ventilators.
Healthy life seems to be growing as fast as lifespan overall, so the fraction of life that is unhealthy is decreasing.
A great dilemma indeed... My intuition tells me to use what's most suited for a given problem under investigation. For example, if I was measuring "how much it cost to acquire a TV set now as compare to X years in the past", I would pick 0% inflation. Of course I could use secondary measure, like my income now and then to get additional "feel" for how big burden the purchase was for the household, now and then. For "progress related" analysis, quality adjusted measure is more suited. All in all, you have to pick the methodology which is better suited for what you are investigating.
Personally, I always prefer simple measures - so, nominal prices. CPI, median household income, etc. measures appear to be simple (and easy to obtain!) but they are really loaded with lots of assumptions which may not help in analysis of a specific phenomenon.
What I would like to see is using the hierarchy of needs put into CPI. Food, shelter & clothing being the greatest proportion. Probably is but too lazy to check 😆. I know prices per ounce have gone up considerably more than what the chart shows. Smaller boxes and less weight for higher prices. Although materials and resources for the most part have been stable or even lower in some cases (not lithium or fertilizers) but steel, wheat, corn, etc. I believe have been relatively stable. Farmers can produce more with technological improvements but equipment costs and fuel are higher. Don’t know why I am rambling on so I will stop with the disjointed thoughts.
In dollar denominated real price terms it fell - same nominal price, more features.
In real price terms in use and utility it rose - again use and utility of additional features.
That's why saying 'real' terms, it is not always clear if you just mean 'adjusted for inflation' aka nominal minus inflation or real in the terms of use.
It goes to show the language taxonomy of the economics 'industry' has competing, contradictory and inconsistent use of terms compared to everyday (English) language.
So can your question be sensibly answered? It all depends on your perspective of the word 'real'. My answer is Yes.
To which I guess I would add, this is the whole point and often excessively overlooked Production Possibility Frontier (PPF) to make things more useful (or efficient in use terms).
Thus to a certain extent there is a 'free lunch'.
Slight wrinkle: quite often, lower quality, older goods can be purchased at discounted prices as stores retain stock or discounters buy old stock from boutique stores - especially online discounters.
Then there are second hand marketplaces like eBay & Facebook marketplace. By virtue of being available for sale in the face of the latest stock they can see very large falls in price.
That $2 CRT tv?
It can be found in an op shop for around that! You probably know a senior friend who bought a new LCD and is giving away their CRT!