it’s not unimportant but it tells you almost nothing about welfare over long periods of time. 1/

consider a person who walked 10 mins to work in 1925 vs someone who commutes an hour / 30 miles today. 2/

the today person is buying in real terms something entirely unaffordable in 1925. her real purchasing power is huge! 3/

any CPI, W/P style calculation would score her as much much wealthier for being able to afford transportation at contemporary norms. 4/

but all that purchasing power must be expended on a commute that in welfare terms buys no more than the 10 walk that was common in 1925. 5/

contemporary circumstances — norms, the nature of the built environment etc — can absorb much or all or much more than all of what you might correctly score as W/P. 6/

the cost of the prerequisites to sustaining that W, the ever-changing cost of the level of resources required to live an ordinary life are not tallied in inflation measures. 7/

that’s not to say the measures are wrong. you really can buy a lot more stuff than you could in 1925! but the relationship between stuff and welfare is very far from fixed. 8/

there’s all kinds of stuff (transportation, education) you need tons more of than you did 100 years ago to live a remotely welfare comparable life. /fin