Keep in mind that their example chose a very gentle substitution (apples and oranges) while my example chose a very extreme substitution (housing and clean water for tents and unfiltered water). A nontrivial amount of your opinion-formation should include deciding where typical substitutions (e.g. moving back in with parents) actually lie on that scale. Of course, this choice is peanuts compared to the choice of whether or not you lump high income earners in with low income earners. Hence my focus on the Elysium test.
Great link. So a GDP deflator corrects for what our current equilibrium would have cost back then, while the CPI deflator corrects for what our equilibrium from back then would cost now?
> CPI doesn't account for the ability of consumers to substitute inferior goods, but GDP doesn't account for the sacrifice involved in doing so.
Would you be down to unpack how that works? I'm intrigued.