Smartphones
Smartphones cost 23% less compared with last year.
But here’s where it gets interesting: Apple’s iPhone has increased in price since last year. Its newest model, the iPhone 14, has a starting price of $800, while the iPhone 13 had a starting price of $700 when it was rolled out last year.
If one of the most popular smartphones got more expensive, why is the BLS saying otherwise?
The way the agency measures price changes for smartphones and other forms of technology are different from how it measures, for instance, price changes for butter. That’s because butter hasn’t changed much over the years. So when the price goes up, it’s easy for the BLS to say butter is relatively more expensive.
Meanwhile, older iPhone models are very different from the latest mod
el for various reasons. Therefore it’s inaccurate to just look at smartphones’ price tags to account for price changes. Instead, the BLS makes a “quality adjustment” when new smartphone models come out.
“For example, CPI analysts have estimated the value of smartphone features such as screen resolution. So if a manufacturer provides a higher resolution screen to the latest model in their smartphone line, the CPI adds the value of additional resolution to the price of the predecessor item,” according to a post by the BLS.
Then analysts return to the older model and add back in the dollar value of the quality adjustments and compare the price to what the newer model costs.
So, the price tags of smartphones could very well be higher than last year, but when taking into account the new features manufacturers added, they’re relatively cheaper.
Tickets to sports games
Tickets to sports games cost 18% less compared with last year.
Last year though, demand for tickets to sporting games shot up as fans could finally attend games in-person once COVID-19 vaccines were rolled out.
So yes, tickets are cheaper, but that’s mainly because they shot up so high this time last year.
TVs
Just like with smartphones, the BLS performs quality adjustments to account for new features in the latest models. But unlike iPhones, the price tags of the latest TV models have dropped as well.
That’s a result of retailers overordering TVs during the pandemic when consumers were flush with stimulus checks. But once that money dried up, they stopped buying TVs. Inflation began to rise for necessities, causing consumers to dedicate a greater portion of their budgets to those items.
Now retailers are discounting TVs, especially during the holiday season.