The shrink and switch factors that most people don't notice are not included in inflation calculations.
These factors are not so hard to detect, but are often not recognized by the shopper over the long term. These are the shrinking package and the shifting product. These are mostly evident in groceries.
We have all seen the size of products decrease and the price increase. Now a 12 pack of gum has 11 pieces. It is almost as if there is a transformation from the little bit extra for the consumer such as the "bakers dozen" of 13 where you get an extra piece, to the "bankers dozen" of 11 pieces, where you get one less.

Another one of the millions of examples, this one too reveals the full factor inflation cost. That is of a large jar of what used to be real Greek olives in a 3.5 pound jar for $7.00. Over a decade or so it evolved into a smaller 2.2 pound jar of "Mediterranean style" olives for $10.00.

Not only has the product cost per pound more than doubled, the product itself is a substitution. The CPI calculator indicates that a $2.00 value in 2005, would be equivalent to $2.73 in 2020. Instead the cost is $4.54, and for a substitution. These olives will probably go well with a favorite Swiss chocolate, now made in New Jersey. There should be no issue making chocolate in New Jersey, but it could be argued that it should be called New Jersey chocolate and not Swiss chocolate.

Regardless, if this example was factored into the CPI, it would probably just show that a jar of olives cost $7.00 in 2005 and now costs $10.00. This is actually an ironic example as the CPI estimated buying power of $7.00 in 2005, equates to $9.56 now.

The reality is that inflation for this example is much higher than the surface picture.

The CPI indicates a increase from $7.00 to $10.00 is only a 36.67% increase over 15 years, or 2.44% per year.
The full factor inflation says an increase from $2.00 per pound to $4.54 per pound is a 127% price increase, or 8.47% per year.

Don't forget, these are not even the original olives, but now a substitution, how can that be factored in? Yes this is but one example, but it is so typical of the shrink and switch that we all see on almost every product we purchase, thus it is a valid representation of how false calculations and srink and switch tactics slowly erode consumers livelyhoods.

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