1.How much can someone change the rate of inflation they face by changing what they purchase? Is this a serious overestimation problem with the CPI? Do you time your purchases around sales? Do you change your purchases because of sales?
If someone is very frugal with their money, they can change the rate of inflation that they face. For instance, if you time your purchases around sales, you will not face as much inflation, however there is not a serious estimation problem with the CPI, the Bureau of Labor Statistics tries to include all the goods and services that the typical consumer would buy. I would consider myself to be a very frugal buyer. Because of how many similar products there are out there, it is very easy to change my purchases because of sales.
2.What about the distortion caused by improvements in goods? Do you think that is a serious problem in measurement? Back in the 1970’s my Dad purchased an early calculator. It handled addition, subtraction, multiplication, and division. It cost nearly $100. Phones have a similar challenge as do cars and even airport bathrooms. If your raise last year was 2% and inflation was 2% did you break even? Or did your life improve?
Technological improvements are always being made which is significantly improving everybody’s quality of life, however this is not a serious problem in the CPI measurements. although goods are becoming more advanced, prices are not necessarily going up because of the technological advances. Looking at the inflation of 2% from last year, I would say that inflation isn’t really increasing, it is actually just our quality of live improving.
Burton's Macroeconomics blog 