[gruez]

> Yes, but hedonic adjustment is basically an attack of the bottom line of inflation as an useful metric IMO.

The underlying premise makes sense though. If your country got richer and everyone started buying high end variants of stuff, and the low-end variants got discontinued, is everyone suddenly worse off?

[makomk]

The trouble is that the reality is probably closer to it simply not being financially worthwhile for manufacturers to offer the lower-end variants anymore - in the case of cars, partly because they're legally required to include these features, but also because the incremental cost of adding those new features shrinks. That is, rather than the cost of a 1990s base-model remaining the same and people just getting higher-end models, the cost of a 1990s base model increases closer to that of more feature-filled models to the point it doesn't make sense to make the features optional. If you think about the cost of making, say, a fancy entertainment or sat-nav interface, that's gone down in a way that the cost of huge chunks of carefully machined, stamped and welded metal hasn't.

Also, the definition of a high-end variant changes over time too. For example, today a 52-inch TV fills the same price niche that a 32-inch one did, say, a decade ago but it also fills the same quality niche - you need to buy the 52-incher to get the same kind of audio and picture quality as a 32-inch set from years gone by, and the 32-inch sets have deteriorated in quality in ways that aren't necessarily visible from the obvious spec-sheet numbers.