Economists use hedonic adjustment to account for changing quality of CPI items : The Indicator from Planet Money We all need a little hedonism in our lives sometimes. A spa day, a good meal ... and modeling to account for quality change? Today, how economists model pleasure – and what it means for inflation data.

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Hedonic adjustment: how to measure pleasure

Hedonic adjustment: how to measure pleasure

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Hulton Archive/Getty Images
Orpheus, a musician from Greek mythology charms Hades and Persephone, King and Queen of the Underworld, with his lyre playing in order to win back his dead wife Eurydice, circa 1200 BC. Images on an amphora from Karlsruhe. (Photo by Hulton Archive/Getty Images)
Hulton Archive/Getty Images

CPI data released today shows that inflation is running at 7.7%: a basket of basic items reflecting what the average American consumes costs 7.7% more than it did a year ago. But how do economists at the Bureau of Labor Statistics calculate inflation when the goods themselves are changing along with their prices?

The answer lies in a technique called hedonic adjustment. Today, we're joined by two economists from the BLS (and a very special, mythical guest) to talk about pleasure — how we can quantify it, how it affects inflation data and how regression analysis can be as enjoyable as sipping ambrosia on the beach.

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For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org.