CPI changes

[John Swindler]

>Fred W. Schneider III" commented:
>
>I know I deleted the original message ... there was a discussion about
>the change in values since 1950 when Pittsburgh Railways sold off the
>Duquesne Gardens site in Oakland.  Looking at the BLS website, I find
>that the consumer price index for all urban consumers (its there from
>1913 on) has gone up 7.43 times since 1950.  That would make $8 million
>then about $60 million today.
>
>The CPI is not a perfect method ... changes in real estate indices might be 
>even better.
>The CPI has been criticized because certain inputs stay constant for too 
>long, i.e. if the cost of steaks go out of site, BLS has been criticized 
>for not substituting chicken sooner.  Same idea if gas prices skyrocket, we 
>cannot assume that people will continue to drive as many miles and 
>therefore the cost of the average persons purchases really didn't go up as 
>much.  Regardless, the CPI changes make a pretty good ballpark way of 
>studying changes.  You can find the actual numbers at
><http://www.bls.gov>.
>
>Comparing real estate to transit fares is probably as much of a base
>balls versus prunes comparison as we can make.  For many years, transit
>fares were driven up out of proportion to other cost increases because
>of the need to cover fixed costs with declining passenger counts.  Then
>we started paying the cost of transit with government subsidies. If you
>were to compare transit fares in 1950 with fares plus subsidies today,
>you probably have a 30 fold increase compared to a 7 fold increase in
>overall costs.  Its horrible to realize how inefficient public transport
>has become.
>
>Does this help?
>



The problem with trying to use transit fares to judge price increases is 
because people have this silly notion that public transit is still a 
business like Yellow Freight, Federal Express or McDonalds.  Maybe 
thirty-forty years ago, but today public transit is no more a business then 
public housing and the local community college.

For instance, what is the "fare" for a transit rider in Pittsburgh?  If you 
said $1.25, your wrong.  When you board a transit vehicle in Pittsburgh, 
your fare is almost $4.00 - you put $1.25 into the farebox and the taxpayers 
pick up the other $2.75 - And this is assuming that Siemens, Neoplan, 
General Motors, etc, provide PAT with free transit equipment (does not 
include capital costs).

Fred's right.  Forget about increases in transit fares.  It's highly 
visible, but irrevelent for judging changes in values since 1950.

John Swindler


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