Da Bears and Da CPI

Sometimes it really is hard to argue with at least one type of quality adjustment that the Bureau of Labor Statistics performs when preparing the Consumer Price Index - the quality of television sets has certainly improved over the last ten years while prices have continued to go down.

It's not clear when first looking at the chart below whether the combination of lower prices and more features is accurately reflected there. Those are some pretty steep yearly declines in "quality-adjusted" prices - especially in the last year.
Going back to the mid 1990s, "quality-adjusted" prices have fallen by more than two-thirds.

Is that a fair way to measure prices? What if you had a 27 inch set in 1996 and just wanted to buy a new 27 inch set ten years later?

It's hard to imagine that the new price would be one-third the old price, but you'd get a flat screen, maybe a few more jacks on the back, and probably a few other extras, but the price wouldn't have dropped this much.
Well, watching the Bears beat the Saints on a big HDTV with a DVR that allows the viewer to effectively watch the game in less than an hour - that makes a pretty convincing case that at least some of the quality adjustments are very real.

How do you measure the quality improvement of the 30-second advance where you can watch a three and a half hour football game in about 45 minutes, zipping through all of the huddles and most all the commercials, pausing only occasionally to catch a new Bud Lite ad?

Our mid-1990s, 150 lb 35 inch TV now sits in the spare room awaiting its fate while the new, embarrassingly large bigscreen HDTV occupies its old spot - a big, beautiful picture that really can't be compared with what it replaced.

Yet the BLS has found a way to factor that into the change in prices that consumers pay.

Does anyone really need a TV or a digital video recorder that is this good?

That's probably the wrong question to ask.