See also
- CPIx-inflation[def]=exclub-driven)
- theoretical-min Retirement burn rate: mostly food+car talked about minimum retirement burn rate and globalization reducing the cost of basic-healthy nutrition
At the 2022 inflation peak, across the countries I know, most of the high inflations actually hit (minor categories or) “elastic” categories [i.e. easily replaced by cheaper alternatives] like food, entertainment, travel. In contrast, A small “hard basket” determines the amount of purchasing power loss , or the shrinking of my dollars (saved or earned) during bad inflation.
This is an Aha insight. The CPI figures and inflation economics are misleading or inapplicable until we uncover this insight. Based on the economics concept of Substitute, this insight is a a fundamental observation, laying a cornerstone for my blogs on CPIx-inflation, burn rate, livelihood, FullerWealth, freedom, exclub, successC/successE, recreations, wellbeing[Kahneman], stresses of modern life..
Inelastic demand (def) .. might be an abstract descriptor. It refers to the limited drop in demand for a good when its price goes up. In the hard basket, consumers still need (“demand”) the same items at the same quantity, even when prices rise.
Q: in SG/U.S. given that many substitute goods come in myriads of price levels, which specific items in my “basket” are the hardest hit by high inflation … 刚性需求 ?
- — half-ranked by hardness
- fruits, raw veg, raw meat/fish, starch
- non-elective medical/dental care .. esp. polyclinic and TCM
- (US) health insurance
- school fees
- utilities .. [telecom, heating,].. To cope, I would eat out, stay outside home longer, take shower at office/swimming
- public transport .. To cope, I would avoid taxi, prefer bicycle, live close to connectivity hubs (U.S. or SG)
- rent .. To cope, definitely relocate to remote, smaller, old houses. RV is popular among older Americans.. [[nomadland]]
- college .. To cope, delay enrollment or choose less expensive colleges.
- — disqualified items
- most foods .. There are many price levels, so I could always opt for “less hiked varieties”
Q: within this hard basket, which items are the biggest in terms of dollar amount?
- rent
- public transport
- utilities
Q: within this hard basket, which 2 items are the “hardest”[least elastic] ?
A: see the half-ranking
— Q: within this hard basket, which 2 items (tend to) experience the fastest inflation?
- rent
- gasoline?
- basic healthy nutrition.. See the singstat data in SG CPI-inflation: 30Y xp, basket composition
To varying levels of effectiveness, governments could slow down inflation in public-education/public-transport/public-utility/public-healthcare costs