As you know, a group of experts empaneled by the Senate Finance Committee -- the Boskin commission -- concluded that the consumer price index has overstated changes in the cost of living by roughly one percentage point per annum in recent years.
About half of this bias owed to inadequate adjustment for quality improvement and the introduction of new goods, and about half reflected the manner in which the individual prices were aggregated. Researchers at the Federal Reserve and elsewhere have come up with similar figures.