In inflation calculation, is quality taken into account? I guess not, given the inherent problem stated in the article.
If that's the case, even if it's true that we can say "sure, quality is declining, but it's fine, just fine", it would follow that inflation is actually much higher than reported.
When you buy a fridge today, it buys you the "fridge service" for a much shorter time span, forcing you to invest a lot more money into that service over a given time span. That's a steep inflation of fridge price that isn't counted in official statistics.
This should be taken into account in inflation calculation. If this was, it would give a much fairer view of the decline in purchasing power.
It is, in theory (hedonic price adjustment can go both ways), but I don't know how accurate their measurement is.
Edit, now that I checked it looks like hedonic price adjustment measurements are performed on only 7.5%[1]of the goods in the CPI basket, and the main goal seems to be to avoid overestimating inflation by tracking quality improvements better.
The examples that the article give are "memory size and CPU speed for computers or horsepower and miles per gallon for cars", that is, technological improvements that would be a reason to adjust inflation value further down because "quality" went up. Without, of course, taking overall lifetime of the product.
So this would in fact make the inflation misreporting problem even worse.
If that's the case, even if it's true that we can say "sure, quality is declining, but it's fine, just fine", it would follow that inflation is actually much higher than reported.
When you buy a fridge today, it buys you the "fridge service" for a much shorter time span, forcing you to invest a lot more money into that service over a given time span. That's a steep inflation of fridge price that isn't counted in official statistics.
This should be taken into account in inflation calculation. If this was, it would give a much fairer view of the decline in purchasing power.