Quality_bias
Quality bias in price indices is a kind of mismeasurement if they do not incorporate data on the quality of goods from period to period, as well as their nominal price.
This article possibly contains original research. (October 2009) |
Personal computers are a canonical case. Because of improvements in computer chips, greater and greater speeds and features have become available, without substantial increases in price. If only price information on personal computers were used, quality bias would cause growth in a consumer price index (CPI) to be overestimated, since an equivalent computer would actually be much cheaper in later periods.