(But in addition, there are those restrictions on housing supply that I already mentioned.)
You are right about insulin probably not having gotten much better. There's a few other goods like that as well. Some of those problems are self-inflicted. Eg education is much more costly these days, too.
Who claimed that stuff is more expensive because it's better?
Taking hedonic adjustments into account when producing inflation numbers is the proper thing to do. Productivity improvements would then show up by decreases in the price level measured like that. We can see that for eg computers. A good enough desktop computer today costs less in nominal dollars than in the early 90s, despite being enormously more powerful.
Yes, you are right that we can not buy many of the crappier things any more. That's partially down to regulation, but also down to there just not being enough demand for lots of crappy stuff to keep production at scale running.
So that makes calculating the price level harder. The usual work-around is to only look at adjustments from one year to the next, and chain them.
Another workaround is to go with the Big Mac index. (https://en.wikipedia.org/wiki/Big_Mac_Index) That index is a bit of a joke, since it just measure the price of a Big Mac. But it's surprisingly useful for what it is.
