We're not talking about everyone being able to afford a better TV than before instead, the TV size at each price and quality tier has gone up over time and people get that size whether they want it or not. This kind of gets at the problem: "the 1998 ad doesn't have 32" TVs and the modern website doesn't have 27" TVs in stock". On the other hand, with the new TV, you can spend 3x on content what you spent on the TV itself. Your old TV provides little value except as a conversation piece when guests come over (if you don't enjoy free OTA content). After all, a TV with nothing to watch isn't very useful. maybe the the modern, cheaper TV is infinity times more entertaining.
#Hedonic adjustments plus#
and you get to enjoy the same TV plus have spare dollars to spend on other entertainment.Īctually.
You can play pretend in fairy land and say that inflation doesn't exist. You're getting a 78% discount without making any inflation or hedonistic adjustment whatsoever. 1998's 50" costs $1500 at Best Buy in raw, un-adjusted dollars. Today's 50" LCD should be no less entertaining than a 50" CRT from 1998, right? I'm not claiming it is more entertaining, just that it isn't less. I initially used smaller ones because I don't recall many people having TVs like that in 1998, but the 1998 ad doesn't have 32" TVs and the modern website doesn't have 27" TVs in stock.ĥ0" is one size that Best Buy carried in both 1998 and today. Why does it need to be 1000% more entertaining? You can perform the same exercise with other size tubes, but the result is basically the same. That gets you to within spitting distance of 10%. I suspect that if you offered most people a CRT version of today's TV, nobody would take it at even half the price. I'm sort of baffled how someone could not agree that the newer one is very clearly better. So the operating cost is lower, you can put it anywhere you want, you have a bigger and nicer picture to look at. īut the new TV has twice as many lines of resolution, a bigger screen, better color, uses a fraction as much power, is lighter and is physically smaller. so that brings us down to about 24% before making any hedonistic adjustment. Then the offical CPI says $300 1998 dollars are worth around $500 2021 dollars.
Just in nominal dollars, not adjusted for inflation, the new TV costs 40% as much as the one from 1998.
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