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Animated chart of the day: Price indexes for selected goods and services, January 1998 to June 2019 – Publications – AEI

Summary:
AEI Animated chart of the day: Price indexes for selected goods and services, January 1998 to June 2019 The new animated “bar chart race” visualization above is a dynamic version on the static “Chart of the Century” that I posted on CD last week and shows the monthly price trends for 15 selected consumer goods and services, along with the overall CPI for All Items and average hourly wages from January 1998 to June 2019. Instead of showing percent changes like in the static chart, this visualization shows the trends in each of the series over time when each series is set to equal 100 in January 1998. Also, I’ve set this visualization to have a fixed scale and lock the horizontal axis instead using a dynamic scale like I used in my previous bar chart races to make it easier to see the

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AEI
Animated chart of the day: Price indexes for selected goods and services, January 1998 to June 2019

The new animated “bar chart race” visualization above is a dynamic version on the static “Chart of the Century” that I posted on CD last week and shows the monthly price trends for 15 selected consumer goods and services, along with the overall CPI for All Items and average hourly wages from January 1998 to June 2019. Instead of showing percent changes like in the static chart, this visualization shows the trends in each of the series over time when each series is set to equal 100 in January 1998. Also, I’ve set this visualization to have a fixed scale and lock the horizontal axis instead using a dynamic scale like I used in my previous bar chart races to make it easier to see the absolute changes over time.

A few things to note:

1. The dramatic drop in the price index for Personal Computers, which quickly falls by half from 100 in January 1998 to below 50 by the end of 1999, and then falls by half again by early 2002, and by again by the end of 2005, by another half at the end of 2011, and by almost another half by 2018. Over the entire 21.5 year period, the quality-adjusted CPI for Personal Computers fell by more than 96% (vs. 57.6% for the overall CPI).

2. By 2018, the CPI for TVs had fallen even more than the CPI for Personal Computers, and over the entire period by more than 97%!

3. Over most of the last several decades, the three items that have increased the most in price are: a) Hospital Services (+210%), b) College Tuition and Fees (+188%) and c) College Textbooks (+182.5) compared to the overall increase in the CPI for All Items of 57.6%.

4. Since 1998 wages have increased by more (+83.2%) than the overall price level (57.6%) reflecting an increase in real wages over the last several decades of more than 25%.

5. Other goods and services that have risen less in price than the overall CPI (57.6%) since 1998, and have therefore fallen in real inflation-adjusted terms include the CPI for New Cars (+2.8%), Household Furnishings (-1.5%), Clothing (-6.6%), Cellphone Service (-53%), Computer Software (-69%), and Toys (-75%).

Bottom Line: As I concluded on my previous post, the significant differences in price changes over time suggest that:

a. The greater (lower) the degree of government involvement in the provision of a good or service the greater (lower) the price increases (decreases) over time, e.g., hospital and medical costs, college tuition, and childcare with both large degrees of government funding/regulation and large price increases vs. software, electronics, toys, cars and clothing with both relatively less government funding/regulation and falling prices.

b. Prices for manufactured goods (cars, clothing, appliances, furniture, electronic goods, toys) have experienced large price declines over time relative to overall inflation, wages, and prices for services (education, medical care, and childcare). Thanks China!

c. The greater the degree of international competition for tradeable goods, the greater the decline in prices over time, e.g., toys, clothing, TVs, appliances, personal computers and furniture. Thanks China!

 

Animated chart of the day: Price indexes for selected goods and services, January 1998 to June 2019
Mark Perry

Mark Perry
Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

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