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Problems of Measuring Cost of Living
Fluctuating in a seemingly unpredictable way, inflation rates are shaped by a range of factors, one of which is the change in the cost of living. However, measuring the specified characteristic is also quite difficult due to the multiple variables that have to be considered while interpreting I and gathering data. For example, in its article, The Economist (2017) explains that there is a difference in the inflation rates experienced by rich and poor people, which implies that the precise analysis will require stratifying the population into several distinct categories. In turn, since the line between the economic classes is quite blurred, the accuracy of the evaluation will suffer. Thus, measuring the cost of living is a rather challenging task.
Reasons for the Problem to Exist
Along with what The Economist (2017) defines as the rich and poor divide, there is also the difference in the experience of urban residents, such as Londoners, and the residents of rural areas. Therefore, when considering the root cause of the problem, one may need to examine the factors causing inequality to exist in contemporary society. The differences in financial and educational opportunities that urban and rural dwellers and representatives of lower and upper classes face can be considered the major factor causing the inequality and the failure to measure the cost of living accurately.
Solutions Suggested in the Article
Since the authors establish that the root cause of the problem can be described as that of social nature, multiple solutions can be suggested, as the article indicates. The Economist suggests using regional indicators as the means of making the analysis more precise, as well as stratifying data based on the level of income of respondents. Although the specified measures can become a viable solution, they do not resolve the main problem, which is the presence of inequality and, primarily, uneven wealth distribution.
Reference
The Economist. (2017). Why it is so difficult to measure inflation [PDF file]. Web.
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