Prices, Poverty, and Inequality
Why Americans Are Better Off Than You Think

  • Title:

    Prices, Poverty, and Inequality
  • Format:

    Paperback
  • Paperback Price:

    15.00
  • Paperback ISBN:

    978-0-8447-4275-5
  • Paperback Dimensions:

    5.5'' x 8.5''
  • 63 Paperback pages
  • Buy the Book


According to conventional wisdom, the economic well-being of all but the wealthiest Americans has stagnated or declined over the past twenty-five years. In Prices, Poverty, and Inequality: Why Americans Are Better Off Than You Think, Christian Broda and David E. Weinstein argue that this idea is based upon misleading measurements of wealth and poverty. The consumer price index used to compute official measures of real wages and poverty ignores two key sources of increased prosperity: the introduction of new and better products and consumers' ability to substitute between goods. Deflating nominal wages by a cost-of-living index that adjusts for these previously unconsidered factors of prosperity suggests that the real wages of the poor have actually risen

by 30 percent since the late 1970s—and that the poverty rate in America has fallen dramatically over the last forty years.

How can we account for the discrepancy between standard measures of economic well-being—which suggest a trend of increased poverty—and alternative measures that indicate an upswing in prosperity? As Broda and Weinstein argue, product innovation has long been a key source of prosperity for American households. New and better household appliances, cellular phones, vehicle air bags, medicines, and computers are among the many product improvements that have benefited Americans, including the poor, over the last few decades. Yet current official price statistics capture only a portion of the benefits that these improved goods provide to American households. Broda and Weinstein conclude that adjusting poverty measures to fully account for the benefits of product improvements reveals that Americans in every income group are substantially better off economically than they were a quarter century ago.


Christian Broda is a professor of economics at the University of Chicago Graduate School of Business.

David E. Weinstein is the Carl S. Shoup Professor of the Japanese Economy at Columbia University.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

David E.
Weinstein

What's new on AEI

image The money in banking: Comparing salaries of bank and bank regulatory employees
image What Obama should say about China in Japan
image A key to college success: Involved dads
image China takes the fight to space
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Wednesday, April 23, 2014 | 12:00 p.m. – 1:30 p.m.
Graduation day: How dads’ involvement impacts higher education success

Join a diverse group of panelists — including sociologists, education experts, and students — for a discussion of how public policy and culture can help families lay a firmer foundation for their children’s educational success, and of how the effects of paternal involvement vary by socioeconomic background.

Event Registration is Closed
Thursday, April 24, 2014 | 12:00 p.m. – 1:30 p.m.
Getting it right: A better strategy to defeat al Qaeda

This event will coincide with the release of a new report by AEI’s Mary Habeck, which analyzes why current national security policy is failing to stop the advancement of al Qaeda and its affiliates and what the US can do to develop a successful strategy to defeat this enemy.

Friday, April 25, 2014 | 9:15 a.m. – 1:15 p.m.
Obamacare’s rocky start and uncertain future

During this event, experts with many different views on the ACA will offer their predictions for the future.   

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.