Why Does the CPI Put Education and Communication in the Same Category?

February 21, 2011

I was looking at the CPI numbers this morning and noticed something interesting. For some reason, the CPI puts education and communications together in the same category:

I can think of one good reason to group the two together: to hide the inflation rate of education. To see what I mean, take a look at this graphic I put together that shows the total and average annual rates of inflation for each of the categories:

Wow. Look at the three subcategories for education compared to the subcategories for communications. Then, notice the the numbers for the education and communications category as a whole. No wonder why the BLS puts these two in the same category.

9 responses to Why Does the CPI Put Education and Communication in the Same Category?

  1. It’s regulatory capture at it best. Good for business bad for citizens.

  2. So if you put the one that is going up together with the one that is going down, it looks like neither are changing? Good call, spin doctors, good call.

  3. Well, I hate to be all into conspiracy theories and such but why else would you pair education with communication? Makes no sense in my opinion.

  4. I don’t think it matters how they are grouped, because they still give you the un-grouped numbers.

    The bigger issue is that when they are averaged together, are they using ‘weighted-averages’ and do the weights make sense.

  5. JP) UTs website says:

    Texas resident on-campus $22,464 – 27,168

    for “Total Cost”: room, board, tuition, books, travel, etc — for instate residents.

    Just using the room/board/tuition numbers, you get $16,704/yr. Where are you pulling your numbers?

    Education in the CPI is tricky though. We have exactly $0 for education expenses for the past 10 years or so (personally) — but in a few more years, it will be a huge chunk of our budget.

  6. I deleted my comment because the numbers were wrong. I used out of state tuition.

  7. JLP) Ah, np — I bet the out-of-state costs have been going up faster than the instate costs.

    From your earlier numbers — does the CPI’s publishes rates of inflation (for education) match what you’ve noticed for in-state in texas?

  8. I’m not sure. It’s in the ballpark as far as I can tell. I remember at one time using $13,000 for tuition room and board for the University of Texas. The problem is that I don’t know how many years ago that was. If it was 11 years ago, then the numbers are right on. If it was less than 11 years ago, then the CPI’s numbers are low.

  9. Can you say “higher education bubble?”