Why do the “official” numbers on food inflation state it’s gone up by tiny amounts like 8%, 19%, 11%, etc. but most of the foods I see has gone up by a minimum of 50%, 100%, 80%?

Question

Why do the “official” numbers on food inflation state it’s gone up by tiny amounts like 8%, 19%, 11%, etc. but most of the foods I see has gone up by a minimum of 50%, 100%, 80%?

In: Economics

Answer 1

Official inflation statistics use a basket of goods. Think of a very full shopping cart of various goods.

They also factor in substitution. If chicken is expensive but beef is cheap, the Bureau of Labor Statistics assumes you’ll switch from chicken to beef.

Finally, while it may not apply to foods, they also refactor the effects of technological and product quality improvements for some goods. For example, for computers:

https://www.bls.gov/cpi/factsheets/personal-computers.htm