ABSTRACT
When the government reports that the inflation rate is 12 0/0, citizens like to think of this as a firm figure on which they can base decisions. Unfortunately it isn't.
The price of eggs and the price of yachts do not move upward at the same rate. Most people buy eggs, but very few buy yachts. How much should each one count when the government tries to set a single index as a measure of the inflation rate? Many would be happy to leave out yachts altogether, but of course the problem extends to more common things, such as the cost of a home. To those who already own their home the changing cost of houses may be of little interest. To those who are looking forward to their first owned home, its rising price is a major factor in inflation. A statistic that compromises between these two views will fit almost no one.
