Dress for Less Since 1998, the price of the Louis Vuitton

“Speedy” handbag has more than doubled, to

$685, while the price of Joe Boxer’s “licky face”

underwear has dropped by nearly half, to $8.99.

As luxury fashion has become more expensive, mainstream apparel has become markedly less so. Clothing is one of the few categories in the CPI in which overall prices have declined—

about 10 percent—since 1998.

Source: The New York Times, May 29, 2008

a. What percentage of the CPI basket does apparel comprise?

b. If luxury clothing prices have increased dramatically since the late 1990s, why has the clothing category of the CPI actually declined by about 10 percent?