Anticipated objections, answered.

No. The Reality Index uses BLS's own household-spending weights from the Consumer Expenditure Survey — the same weights BLS uses to construct CPI itself. The basket is not selected by us. It is defined by BLS based on empirical household spending patterns. Our methodology is the same as BLS's in this respect; the only difference is the prices feeding the buckets.

Of the items we track individually, five ran slower than CPI over 1980-2025: chicken breast, whole milk, white bread, electricity, and gasoline. We publish these with the same prominence as items that ran faster than CPI. The food category as a whole grew 3.03× — actually slower than CPI's 3.91×. If we were cherry-picking, we would not be publishing this.

No. The Reality Index differs from ShadowStats in three important ways:

First, our methodology is fully published. Every component series, every weight, every data source is documented on the site. ShadowStats does not publish its detailed methodology, which is the main reason it is not accepted in the academic literature. Anyone can replicate the Reality Index from the data sources we cite.

Second, our headline number is much more conservative. ShadowStats reports inflation rates 5-10 percentage points higher than CPI year over year. We report a cumulative gap of 32% over 45 years — about 0.6 percentage points per year on average. This is approximately the same range that mainstream economists like Robert Gordon estimate for the Boskin-era adjustments cumulatively. We are in the credible zone, not the ShadowStats zone.

Third, we publish our limitations openly. The "What Reality Index Doesn't Measure" essay catalogs every inflation vector we know exists but cannot quantify rigorously. ShadowStats does not do this.

The Chapwood Index publishes inflation estimates of 10% or higher per year, several times the official CPI. Its methodology has been widely criticized by economists, most notably the blog Bond Economics, for being entirely opaque. Chapwood does not publish its basket of items, its weights, its data sources, or its methodology. Without methodological transparency, there is no way to evaluate whether its numbers are credible.

The Reality Index is the opposite. Every component series is named. Every weight is published. Every data source is cited and hyperlinked to the primary source. Critics can verify our work item by item, year by year. The standing commitment is to revise the methodology when revision is warranted — which requires publishing the methodology in the first place.

The Reality Index is principally-not-partisan accountability journalism. It does not endorse a political party, a monetary policy regime, or a particular economic philosophy.

The Bureau of Labor Statistics is a federal agency, and federal agencies make methodological choices that have political consequences. Pointing out those consequences is not partisan. Both major political parties have had opportunities to revise CPI methodology and have chosen not to — the Boskin Commission's recommendations were implemented under President Clinton, the Chained CPI for tax brackets was enacted in the 2017 Republican tax law, and Social Security COLAs continue to use CPI-W under every administration. The methodology is a bipartisan status quo.

The Reality Index measures what it measures. It does not advocate for what should be done about the gap. That is a policy question. Reasonable people will disagree about it, and the Reality Index does not attempt to resolve those disagreements.

We do not ask anyone to trust the Reality Index as a substitute for CPI. We publish a different measurement that answers a different question.

CPI tells you how much the cost of a quality-adjusted, substitution-adjusted basket has grown — useful for monetary policy and for indexing federal benefits, both of which have been the CPI's primary purposes since 1983. The Reality Index tells you how much the cost of a fixed specification of common purchases has grown — useful for families wondering why their grocery bill feels higher than the news reports, and for analysts who want a benchmark that does not move with the basket.

Both are useful measurements. They are not in competition. Federal Reserve will continue to use CPI for monetary policy. Families and journalists looking for a different question to be answered now have a different answer available.

Agreed. Hedonic adjustment is methodologically sound for many goods, particularly technology and durable goods where feature improvements compound clearly over time. We do not dispute the principle.

What we dispute is the consistency of application. BLS adjusts prices downward when product quality rises but does not symmetrically adjust upward when product quality falls. Airplane seat pitch has compressed. Customer service has shifted to automated systems. Self-checkout has moved labor from the retailer to the customer. Industrial agriculture has changed the nutritional content of supermarket eggs, chicken, and beef. None of these quality declines triggers a corresponding price increase in CPI methodology.

The Reality Index holds the specification constant — same dozen large grade A eggs, same gallon of gasoline, same pound of ground beef — and lets the price float. This is a deliberately conservative methodological choice. We are transparent about being so. See the "What Reality Index Doesn't Measure" essay for the full reverse-hedonics discussion.

Also agreed. The substitution effect is real and observable. The question is what to do with it.

CPI's geometric mean formula and Chained CPI methodology both treat substitution as a reduction in the cost of living. A family that switches from beef to chicken when beef prices rise is, in this framework, experiencing less inflation than a family that continues buying beef. The Reality Index disagrees with this framing. Substitution toward less-preferred goods is not the same as the cost of living holding constant. If a family's grocery budget stays flat in dollars but they're now eating chicken instead of beef and store-brand instead of name-brand, their real consumption has declined even if no inflation is reported. Substitution measures adaptation to inflation, not absence of it.

This is a methodological disagreement, not a factual one. Both approaches have legitimate intellectual lineages. We chose the fixed-basket approach because it answers the more useful question for a family that wants to know whether their previous standard of living has gotten more expensive.

There is a respectable academic case for OER. The argument: a home is a capital good. CPI should measure the consumption service the home provides, not the investment cost of owning the asset. OER attempts to isolate the consumption service by asking what the home would rent for.

The Reality Index uses a different approach because we are answering a different question. For families who are actually homeowners with mortgages — or who are saving to become one — what matters is the all-in carrying cost of ownership: principal, interest, taxes, insurance, maintenance. That is what hits the household budget. OER does not measure this. It measures a theoretical rental equivalence that no homeowner actually pays.

We compute the all-in housing carrying cost using FHFA home prices, Freddie Mac mortgage rates, and standard assumptions about property tax, insurance, and maintenance. Over 1980-2025, this approach produces housing inflation of 4.32× — meaningfully higher than CPI's housing measurement of approximately 3.5×. The methodology is documented in the methodology paper.

The Reality Index basket is constructed to cover the major categories of household spending using BLS's own Consumer Expenditure Survey weights. The categories included — housing, transportation, food at home, food away from home, health care, utilities, communications, education, recreation, pet — sum to approximately 95% of household spending per BLS CES. The remaining 5% is small categories like apparel and personal care that we don't yet break out individually but that are captured in the discretionary bucket via the BLS subindex.

Within each category, we use independent retail data where it exists (KFF for health, NCES for tuition, FHFA for home prices, AAA for vehicles, EIA for gasoline, BLS Average Price Data for food and electricity) and BLS subindexes where it does not. This is a complete-coverage measurement, not a partial one.

A fair observation. The Reality Index is built primarily on BLS, Census, FHFA, EIA, and NCES data — all government sources. We are not anti-government-data. We are anti-particular-government-methodology in the construction of CPI.

The raw retail prices BLS publishes in its Average Price Data series are entirely usable for our purposes because they are not subject to the substitution and hedonic adjustments we critique in the headline CPI. We use BLS's own underlying retail data to build a different number from BLS's own headline CPI. This is internally consistent: we trust the data, we are publishing a different methodology applied to the same data, and we are transparent about what we changed.

Tom Elliott is not an economist. He is the founder of Grabien and a former editorial pages editor at the New York Sun and the New York Post. He has been working on the Reality Index for five years.

The Reality Index does not require an economics PhD to construct, because the methodology is not novel. The data sources are all standard. The weights are BLS's own. The calculations are arithmetic. What the Reality Index requires is the editorial discipline to publish the methodology openly, the time to track down every component series carefully, and the willingness to publish findings honestly even when they complicate the project's thesis (food prices slower than CPI; direct taxes reducing the gap).

Expert review is welcome and ongoing. The methodology is published precisely so that economists, statisticians, and policy researchers can evaluate and critique it. Methodological corrections from any reader are welcome at info@realityindex.co.

No. CPI will continue to be used by the Federal Reserve for monetary policy, by the IRS for tax bracket adjustments, by the Social Security Administration for COLAs, and by federal contracts and pensions for inflation indexing. The Reality Index has no aspiration to replace these functions.

The Reality Index exists for families, journalists, analysts, and policymakers who want a different question answered. CPI tells you what the cost of a quality-adjusted, substitution-adjusted basket has done. The Reality Index tells you what the cost of a fixed specification has done. Both are useful. They are complementary, not competing.

There isn't one. The Reality Index is funded out of Grabien operations. There are no ads, no subscriptions, no paywalls, no premium tiers, no sponsored content, no data licensing. The site has no e-commerce. The project does not solicit donations.

In a future version, we may explore a research-grade subscription tier for institutional users (pension funds, financial analysts, policy researchers) who want underlying data exports, methodology consulting, or custom basket calculations. None of this is planned for v1. The headline data and methodology will always be free and openly published.

The standing commitment is documented on the headline rate page, the methodology paper, and the methodology one-pager: "Reality Index is built to be as accurate as possible, not as accurate as it is today. If we identify a more rigorous data source, a methodology improvement, or a measurement error, we will publish the update, announce the change in /news, and revise the affected pages with a timestamped methodology note."

In practice, this means corrections get published the same way major findings get published. A methodology change that moves the headline number gets a /news post explaining what changed, why, and what the new number is. The version history is preserved. Anyone citing a prior version can verify what they cited and what changed.

The Reality Index does not take a position on policy. The measurement is the contribution; what to do about it is a separate question that requires balancing multiple considerations the Reality Index does not attempt to weigh.

What the Reality Index does establish is that the gap between official CPI and what families actually pay is large, persistent, and not explained by any single methodological controversy. It exists under every reasonable weighting methodology. It is concentrated in housing and health care — exactly the two categories where CPI methodology is most contested. Policymakers who want to address the gap have a measurement to work from. Policymakers who do not want to address it have a measurement to argue against.

The Reality Index's job is to make the gap visible. The policy debate is the country's job.