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To: Irontank
Its why the CPI does not account for food costs, energy costs...or the biggest expense for most Americans...the price of homes and the accompanying mortgage payments.

You are incorrect.

CPI-U includes food and energy costs. It also includes housing costs.

BLS pdf file

CPI tracks average rental costs instead..

How do you think housing prices should be included in CPI? Spell it out.

52 posted on 12/01/2005 12:04:34 PM PST by Toddsterpatriot (The Federal Reserve did not kill JFK. Greenspan was not on the grassy knoll.)
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To: Toddsterpatriot
How do you think housing prices should be included in CPI? Spell it out.

What fraction of the public rents, and what fraction owns? Reflect that ratio, and what the underlying markets do. For example, if 1/3 rents and 2/3 own, and rents get cheaper by 10%, but new houses double, have the "housing" part of the index show 1/3 of .9, plus 2/3 of 2.0, or, 1.633 net increase in average cost.

57 posted on 12/01/2005 12:57:52 PM PST by coloradan (Failing to protect the liberties of your enemies establishes precedents that will reach to yourself.)
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To: Toddsterpatriot

I'm not incorrect...core CPI (the most oft cited measure by the Fed and its cheerleaders in the financial media) specifically excludes food and energy prices

As for how to track housing costs...I'm not a statistician but if the purpose of the CPI is to measure the living costs incurred by the average household...why limit the cost of housing criteria to rental prices? All things being equal, as the cost of buying a house goes up...the rents landlords can charge should go down.


60 posted on 12/01/2005 1:10:32 PM PST by Irontank (Let them revere nothing but religion, morality and liberty -- John Adams)
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