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then again, you're probably right, too; they probably also lie about inflation ON TOP of all the sneaky adjustments they do.
there are actually TWO forms of downgrades: one is "substitution" the other is "hedonics".
"substitution" is what fasttense described -- as the price of the basket good goes up, people naturally substitute a cheaper alternative. so the new basket weighting counts the cheaper item more and the inflating item less on the grounds that the cheaper item is now a larger part of peoples' purchasing. of course, that's how people COPE WITH inflation, but that point seems to be lost on those who control the official statistics.
"hedonics" is a further adjustment based on the "improvement" in the product. this year's car is better than last year's car, so you can't say that the entire price increase is due to inflation; part of that price increase is due to the fact that you're getting a better product. of course, this is obviously subject to manipulation and gross distortion. it's especially inappropriate in cases such as cars, where the exact same new car as was available last year simply isn't available anymore. if people could keep buying brand new 2005 accords every single year, but CHOSE to step up to the 2006 model, then hedonics might be at work. but they can't buy the 2005 model anymore, at least not brand new.
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