Wikinvest Wire

Is the BLS catching all these "quality adjustments"?

Monday, August 04, 2008

With all the nickel-and-dime rule changes that airlines are undertaking in attempts to remain competitive on the fares they charge while at the same time staying out of bankruptcy court, you have to wonder if the BLS (Bureau of Labor Statistics) is making any quality adjustments to their price data for air travel.

This report about Jetblue's latest penny-pinching move is sure to have some workers at the BLS scratching their heads, while JetBlue passengers are left with sore necks and cold legs.

JetBlue charging $7 for pillow, blanket kit

NEW YORK - JetBlue Airways Corp. said Monday it is now charging customers for pillows and blankets.

The carrier has done away with the recycled blankets and pillows used on its flights, and has started offering an "eco-friendly" travel blanket and pillow that can be purchased for $7 on flights longer than two hours. The pair come in a kit with a $5 coupon to home furnishings retailer Bed Bath & Beyond.
...
The carrier said last month it expects to collect about $40 million from customers buying seats with extra leg room this year. Its $15 fee for a second checked bag is expected to translate into about $20 million in additional revenue. A ticket change fee, which doubled to $100 in the second quarter, is part of a "basket of fee changes" expected to produce about $50 million in extra revenue in 2008.
According to data at the BLS website (which, after a redesign, has a nicer look and is perhaps better organized, but most people just go there for the same data month after month and now they have to re-learn where everything is), airline fares have risen dramatically in the last year.
It would be interesting to see if and how "quality adjustments" have been applied to this data set recently - anyone with info, please leave a comment.

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3 comments:

Anonymous said...

Tim,

BLS means Bullshit, Lies and Statistics

Anonymous said...

Tim,

BLS means Bullshit, Lies and Statistics

Janel B said...

Well, for one, seasonal adjustments have been made to this chart.

For those who don't know what seasonal adjustments are, the typical price patterns (summer sales, etc.) are accounted for, so you can more easily compare one month's price change to another month's no matter what time of year.

You should probably look at the non-seasonally adjusted index to get a better picture on how the airline fares have gone up.

And, I'm sure if you wanted to find out whether pillows or blankets factor in as "quality adustments," they'd tell you. They're people, too. It looks like they have contact phone numbers: http://www.bls.gov/cpi/cpicont.htm

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