Consumer Price Index Deception: Why Mortgages Are Excluded

The article questions the methodology behind Israel's Consumer Price Index (CPI), specifically highlighting the exclusion of mortgage costs. The author, Yehuda Shroni, argues that this exclusion creates a misleading picture of inflation, particularly for homeowners.

By omitting mortgage expenses, which represent a significant portion of household budgets for many Israelis, the CPI may not accurately reflect the true cost of living increases. This omission can lead to a distorted understanding of economic conditions and potentially impact policy decisions that rely on inflation data.

The piece implies that this exclusion is a deliberate act, referred to as a 'bluff' or deception, designed to present a rosier economic outlook than reality. The author poses the question of why such a crucial component of housing costs is left out of the calculation, suggesting it undermines the index's credibility.