Rasmus Fleischer"During the 20th century, the Consumer Price Index (CPI) became increasingly indispensable as a tool for understanding and managing the economy. Nevertheless, it has never been entirely clear what this index is supposed to measure, let alone how the measurement is to be done in practice.
Not only commodity prices change over time – the commodities themselves change as well. The price of falukorv [a kind of sausage] is meticulously registered each month. But this data might not tell you how much sausage you get for the money, if it is the meat mass is over time diluted with potato flour. When it comes to clothing, it has been proven notoriously difficult to produce price statistics when rapid changes in fashion means that the offerings in stores are constantly shifting. When any new type of product appears on the market, it is an open question whether its price should be considered comparable to any of the prices previously registered in the statistics.
It simply isn't possible to measure inflation without estimating the quality of goods. But the valuation of quality can only be subjective, based on the needs and preferences of an imagined consumer.
"Varors värde" is the first historical study that clarifies how this so-called "quality problem" has been handled in practice, in the work of calculating Sweden's CPI. The book raises questions about fundamental economic knowledge that is usually taken for granted. Alternative valuations of quality could result in radically different histories about the development of living standards over time. At the same time, "Varors värde" sheds new light on 20th-century consumer culture: a very concrete story about Danish pastry, nylon stockings and automobile emissions."
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