The CPI has a number of (serious) problems and I would never suggest that congress attempted to change the calculation for anything other than cynical reasons, but the proposed change would coincidentally be the better measure.
The current method which is often used to adjust nominal expenditures into current dollars is calculated using a Laspeyres index which, year-over-year, does not account for the fact that when prices change people shift their patterns of consumption.
A Paasche index is somewhat the reverse of this in that it assumes that what you purchased last year was the same as what you purchased this year.
The Fisher index is the geometric mean of the two and if you've had a chance to study some of the methods and difficulties of constructing price indexes, it does offer a plausible compromise between the two, allowing for substition but giving some weight to both indices.
However that it accomodates changes in consumption or "substitution" lets lobbies like the AARP exclaim that it hides the case that retirees have to switch from beef tenderloin to cat food when prices rise.
But in actuality it's both a pretty minor change and the better measure of price changes (if the underlying data can be trusted).
The current method which is often used to adjust nominal expenditures into current dollars is calculated using a Laspeyres index which, year-over-year, does not account for the fact that when prices change people shift their patterns of consumption.
A Paasche index is somewhat the reverse of this in that it assumes that what you purchased last year was the same as what you purchased this year.
The Fisher index is the geometric mean of the two and if you've had a chance to study some of the methods and difficulties of constructing price indexes, it does offer a plausible compromise between the two, allowing for substition but giving some weight to both indices.
However that it accomodates changes in consumption or "substitution" lets lobbies like the AARP exclaim that it hides the case that retirees have to switch from beef tenderloin to cat food when prices rise.
But in actuality it's both a pretty minor change and the better measure of price changes (if the underlying data can be trusted).