The Pleasure of Making Do

Hedonic technique  (from "pleasure") is an accounting effort to incorporate quality changes into evaluation of pricing. This is done by breaking everything--product, labor--into its constituent parts and evaluating their values individually.  A refrigerator with an improved heat exchange system, a better motor and a more efficient lighting system could be seen as a cheaper product despite being technically more expensive because it offered more. So an engineer making 100K when transferred to a less advanced country who finds he is able to live better for less would be seen by the hedonic method to have received a raise.

Wonderful things can happen when both components being analyzed are variables.

While this seems as modern "angels on the head of a pin" navel gazing, there might be some aspects here worth considering on a larger scale: How do people see their comfort and does it change over time? My parents had some specific aims in their financial life. They wanted a house they liked, a car and maybe a second used car, a decent education for their children and some promise of a comfortable retirement that would not necessitate a large decline in their lives. Succeeding in those hopes would be seen as comfort.

How about their grandchildren? Maybe in the future they will rent and not own a house. Maybe they will send their children to trade school and not college. Maybe they will feel real enjoyment with a good tv, cable and a great phone so that their lives, while smaller than their grandparents, will be at least as fulfilling.

So the older generation would see a decline in living standards the younger generation does not see.