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This is a great example of how you can make up anything by aggregating unrelated statistical measures and then mislead people with a new definition on top of an

This is a great example of how you can make up anything by aggregating unrelated statistical measures and then mislead people with a new definition on top of another woozy commonly used definition.

smallnamespace 8y ago
We can certainly argue the technical merits of how they created their 'generation-weighted price index', but differential impacts of inflation seems plausible on the face of it. If you are looking for work in a big city, and big city real estate prices are growing much faster than nationwide, that is a real effect.
- j-c-hewitt 8y ago
  Well... sort of, but why call it 'inflation'? That certain age groups tended to act in certain ways and were impacted by differences in price trends in different ways -- that's accurate. What's misleading or confusing is to then redefining the already-muddled term of 'inflation' from an absolute index to multiple indices and then trying to say that because Index B went up more than Index A that some group of people were much more impacted by Index B than another people were by Index A. The Fed has a price index that most entities in the US use to measure what it calls inflation. There are plenty of arguments out there that go into detail about how that index can be misleading and how certain institutional prerogatives encourage the people who maintain that index to keep it misleading (e.g. many entities are obligated to increase salaries and pension payouts tied to the CPI).
  - ghaff 8y ago
    That's a good way of putting it. The various market baskets that make up the various inflation measures contain goods that will matter to some people more than others. And some of the big ticket items will disproportionately affect certain groups. Want to live in a high-cost urban area and don't already own a home? Of course, rising housing prices will affect you more than someone who already owns in one of those areas or lives somewhere else. Are pre-college? Education costs more relatively than it used to? But, yeah, I don't think inflation measures ever claimed to be equably applicable to everyone, especially those measures that excluded some of the major costs precisely because they affect different groups.
  - smallnamespace 8y ago
    > why call it 'inflation' Sibling comment also asks this question, so I'll just respond here: inflation measures the purchasing power of some nominal currency, but that measurement is always relative to a basket of goods. CPI is a basket of 'typical' consumer goods that an average person might buy. But if you're not the average consumer, then in what sense is CPI relevant to you, rather than to a macroeconomist? I agree that there's a risk of confusion, but I think the confusion is inherent in what we're trying to measure (I have some dollars, how much stuff [that I care about] can I buy with them?), and not mainly a function of terminological confusion. You could imagine a service like Mint that has all your spending data and calculating your own 'personal CPI', privacy considerations notwithstanding.
    - throwaway2048 8y ago
      not to mention CPI dosent include costs like education, housing or healthcare, which is completely absurd.
- gmiller123456 8y ago
  >big city real estate prices are growing much faster than nationwide Important point to make is that is not inflation. Inflation is a decrease in the purchasing power of a currency, and it can be inferred by the cost of many products going up across the entire market that currency is used. But one product going up in one segment of the whole economy is not inflation. What you're referring to is more accurately described as a local cost of living.
IncRnd 8y ago
It's also a great example of using statistics to create a conclusion that fits a narrative, based upon statistically insignificant behavior. This article is entitled, "Over the Past 5 Years, Inflation for Millennials was 14% Higher than for Baby Boomers". Yet, we find out in the last paragraph, indeed in the final sentence, that there is virtually no difference between groups over a longer, more significant period of 18 years. There are three kinds of lies: lies, damned lies, and statistics.
- tjpaudio 8y ago
  Their use of the word significantly in this context does not refer to statistical significance. The percentages you are referring too are just basic metrics based on the last years data, not something that was t-tested. The longer time period changes the starting index, it doesn't really make this type of analysis more or or less statistically significant. As the author alluded, this could mean that economic mechanisms close this gap over time when it appears, or it could be a recent effect. Your criticism isn't really valid.
  - IncRnd 8y ago
    You are making a statement about statistics that isn't correct. Statistics is collecting and analyzing numerical data, which is what this article does. That is a truth, regardless of it being a different sort of analysis than what you believe to be the only model of statistics. That is also orthogonal to what I wrote, which you seemed to intentionally misunderstand in order for you to argue.
- CompelTechnic 8y ago
  I think the way that percentages were expressed in the headline was intentionally deceptive- 14% seems like a lot of inflation in 5 years! That makes for good clickbait. But the percent that is being talked about is the comparative difference between groups, per the line: Over the past five years, millennials have seen their goods become 8.7% more expensive, Generation X 8%, and baby boomers 7.6%. This means that the price increase for millennials was 14% higher than for baby boomers.
scarface74 8y ago
Real world example. We just bought a house about two years ago. Say a younger couple living in our same area of town was renting. Our housing cost may have gone up 5% because of insurance and taxes, but the couple renting would have seen rent go up by 30% during the same period.

This is a great example of how you can make up anything by aggregating unrelated statistical measures and then mislead people with a new definition on top of another woozy commonly used definition.

smallnamespace 8y ago

We can certainly argue the technical merits of how they created their 'generation-weighted price index', but differential impacts of inflation seems plausible on the face of it. If you are looking for work in a big city, and big city real estate prices are growing much faster than nationwide, that is a real effect.

j-c-hewitt 8y ago
Well... sort of, but why call it 'inflation'? That certain age groups tended to act in certain ways and were impacted by differences in price trends in different ways -- that's accurate. What's misleading or confusing is to then redefining the already-muddled term of 'inflation' from an absolute index to multiple indices and then trying to say that because Index B went up more than Index A that some group of people were much more impacted by Index B than another people were by Index A. The Fed has a price index that most entities in the US use to measure what it calls inflation. There are plenty of arguments out there that go into detail about how that index can be misleading and how certain institutional prerogatives encourage the people who maintain that index to keep it misleading (e.g. many entities are obligated to increase salaries and pension payouts tied to the CPI).
- ghaff 8y ago
  That's a good way of putting it. The various market baskets that make up the various inflation measures contain goods that will matter to some people more than others. And some of the big ticket items will disproportionately affect certain groups. Want to live in a high-cost urban area and don't already own a home? Of course, rising housing prices will affect you more than someone who already owns in one of those areas or lives somewhere else. Are pre-college? Education costs more relatively than it used to? But, yeah, I don't think inflation measures ever claimed to be equably applicable to everyone, especially those measures that excluded some of the major costs precisely because they affect different groups.
- smallnamespace 8y ago
  > why call it 'inflation' Sibling comment also asks this question, so I'll just respond here: inflation measures the purchasing power of some nominal currency, but that measurement is always relative to a basket of goods. CPI is a basket of 'typical' consumer goods that an average person might buy. But if you're not the average consumer, then in what sense is CPI relevant to you, rather than to a macroeconomist? I agree that there's a risk of confusion, but I think the confusion is inherent in what we're trying to measure (I have some dollars, how much stuff [that I care about] can I buy with them?), and not mainly a function of terminological confusion. You could imagine a service like Mint that has all your spending data and calculating your own 'personal CPI', privacy considerations notwithstanding.
  - throwaway2048 8y ago
    not to mention CPI dosent include costs like education, housing or healthcare, which is completely absurd.
gmiller123456 8y ago
>big city real estate prices are growing much faster than nationwide Important point to make is that is not inflation. Inflation is a decrease in the purchasing power of a currency, and it can be inferred by the cost of many products going up across the entire market that currency is used. But one product going up in one segment of the whole economy is not inflation. What you're referring to is more accurately described as a local cost of living.

IncRnd 8y ago

It's also a great example of using statistics to create a conclusion that fits a narrative, based upon statistically insignificant behavior. This article is entitled, "Over the Past 5 Years, Inflation for Millennials was 14% Higher than for Baby Boomers". Yet, we find out in the last paragraph, indeed in the final sentence, that there is virtually no difference between groups over a longer, more significant period of 18 years. There are three kinds of lies: lies, damned lies, and statistics.

tjpaudio 8y ago
Their use of the word significantly in this context does not refer to statistical significance. The percentages you are referring too are just basic metrics based on the last years data, not something that was t-tested. The longer time period changes the starting index, it doesn't really make this type of analysis more or or less statistically significant. As the author alluded, this could mean that economic mechanisms close this gap over time when it appears, or it could be a recent effect. Your criticism isn't really valid.
- IncRnd 8y ago
  You are making a statement about statistics that isn't correct. Statistics is collecting and analyzing numerical data, which is what this article does. That is a truth, regardless of it being a different sort of analysis than what you believe to be the only model of statistics. That is also orthogonal to what I wrote, which you seemed to intentionally misunderstand in order for you to argue.
CompelTechnic 8y ago
I think the way that percentages were expressed in the headline was intentionally deceptive- 14% seems like a lot of inflation in 5 years! That makes for good clickbait. But the percent that is being talked about is the comparative difference between groups, per the line: Over the past five years, millennials have seen their goods become 8.7% more expensive, Generation X 8%, and baby boomers 7.6%. This means that the price increase for millennials was 14% higher than for baby boomers.

scarface74 8y ago

Real world example. We just bought a house about two years ago. Say a younger couple living in our same area of town was renting. Our housing cost may have gone up 5% because of insurance and taxes, but the couple renting would have seen rent go up by 30% during the same period.