In the past year, inflation has tacked on 4.2% to your cost of living -- or so the most popular yardstick for measuring inflation, the Consumer Price Index (CPI), will tell you.

That's a high number, of course, but if you've felt that your personal inflation burden over the past year far exceeded that figure, you're certainly not alone. Calculating inflation is a monstrous task that's bound to come up less than perfect, but the torture chamber of adjustments the CPI goes through is probably one most supreme courts would deem unconstitutional. Here are a few important CPI contortions to keep in mind.

The substitution effect
You might as well call this one the "substitution of reality" effect. As the BLS (the organization that calculates the CPI) puts it, "... consumers can and do, to some degree, insulate themselves from the impact of higher prices by adjusting their spending to favor relatively lower-priced goods or services."

In English, this basically means that you won't necessarily feel the pinch of rising prices, provided you shift your purchase to something cheaper. The classic example: If the price of beef goes up, people switch their preference to chicken, so not all the increase in the price of beef counts as inflation -- despite any adverse effects it'd have on beef hogs like McDonald's (NYSE:MCD) or Burger King (NYSE:BKC).

Geometric weighting
This one's related to the substitution effect. Let's say the price of gas makes up 10% of the CPI. Now let's assume the price of gas doubles in a year. To reflect this, you'd think that gas should now make up 20% of the CPI. Wrong! The weight might stay at 10%. Why? Because if the price doubles, you'll use half as much as you did before ... or so the theory goes. For many products, like gas, this is a ludicrous assumption -- even if the price rises, you likely still have to drive the same amount as you did before (or close to it).

Hedonic price changes
TV funnyman Stephen Colbert recently scored a few laughs when he quipped, "When I first started paying \$4 a gallon for gas, I didn't mind. I thought I was just getting better gas." But all joking aside, the CPI uses a calculation that isn't too different.

In what they call hedonics, the prices of certain goods the CPI uses can be manipulated to reflect changes in quality. For example, if a Dell (NYSE:DELL) computer costs \$1,000 this year, but the processor is twice as fast as last year's \$1,000 computer, the CPI might chop the price down to \$500 to reflect the improved quality -- even though you still have to pay \$1,000 when you purchase it. While the adjustments likely aren't quite as large as my example, the dilemma still stands: The price you have to pay might not be the price the CPI assumes you should have to pay.