[ChadNauseam]

I don't understand why. People spend money on other things besides housing. Because people spend money on multiple things, it doesn't really make that much sense to say that our index of inflation should track be one thing. I mean, if the price of food and healthcare tripled, I think you would probably say that the inflation metrics should go up.

Ofc, focusing on just one thing is very convenient for people who want to tell a particular story. (inflation is so bad! look at housing! there's so much deflation! look at food and TVs!)

[markus_zhang]

I think it's because housing is the biggest expenditure for my family. Like I said, you should build your own index, not using the CPI or other people's index. Similarly, change in life can increase expenditures, too, e.g. getting a child prompts the family to buy a house instead of staying in a condo.

For my family, housing is easily the primary expenditure -- around 6,000 CAD while (food + vehicle) amount to less than 2,500 CAD monthly. For a similar family in the same area with on vehicle, I estimate that housing probably takes at least half of their expenditure.

[dijit]

Thats the issue with CPI, it tells a skewed story because it makes presumptions about volumes of things people buy.

If Eggs go up 0% and Rent goes up 50%, CPI indicates a “25% growth” which is stupid.

[brainwad]

Yes, that would be stupid, which is why it doesn't work that way. The basket is weighted according to how much people spend on each item. Eggs are not weighted the same as rent.

The CPI does have a problem with not updating the basket as frequently as it could, which means it doesn't catch substitution effects and tends to overstate inflation.