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I don't know about inflation in the UK but I live in the EU and according to the article the inflation here is 5.5% and that's an absolute joke. Price of most t

by veave 3y ago

I don't know about inflation in the UK but I live in the EU and according to the article the inflation here is 5.5% and that's an absolute joke. Price of most things including food or energy has increased by 50% at least

carlmr 3y ago
My energy bill is up from 32 c per kWh pre-pandemic to 37 c per kWh now. Gasoline was 1.79 yesterday and was about 1.70 pre-pandemic. Food prices have risen, but some more some less, but 50% seems too high. But maybe Germany is different.
- rasz 3y ago
  Stupid Nestle cornflakes went 50% up in last 12 months, same for the milk.
  - carlmr 3y ago
    Don't buy Nestlé then? I'm also not doubting that some products went up by 50%. My point is rather that most products I buy have remained surprisingly stable in price.
jjgreen 3y ago
This is by design. All of Europe has now followed the UK's lead in preferring the geometric mean over the arithmetic [1]. The philosophical justification for this is that when some products become more expensive relatively, then the consumer will switch to products which have a higher utility-to-cost ratio, so are less affected by the change. That's all bollocks of course, the real reason is the geometric-arithmetic mean inequality: for any set of positive numbers a,..., GM(a, ...) <= AM(a,...). So your way forward is clear: eat less food, use less heat, buy more surfboards (or whatever it is which hasn't gone up as much). [1] https://ec.europa.eu/eurostat/statistics-explained/index.php?title=HICP_methodology#Computation_issues https://ec.europa.eu/eurostat/statistics-explained/index.php...
- veave 3y ago
  lmao... so olive oil now costs double what it costed a couple of years ago... are they telling me I should switch to canola so my costs increase by 5.5% only? These people really deserve to end like the French monarchy.
  - jjgreen 3y ago
    ... or melt down some margarine ...
    - NikkiA 3y ago
      Don't worry, you don't even need to use any energy for that, the heatwaves will sort it for you.
  - ephbit 3y ago
    Isn't canola hugely more beneficial than olive oil in terms of nutrition anyway? Wondering how the mediterranean countries succeeded in marketing olive oil as especially valuable/healthy oil.
- ephbit 3y ago
  Your linked site states: > The harmonised indices shall be annually chain-linked Laspeyres-type indices. And further down: > Elementary aggregate indices for the HICPs are computed as the ratio of the geometric average of prices or the ratio of the arithmetic average of prices. The arithmetic mean of price relatives may only be applied in exceptional cases and where it can be shown to be comparable. I read this as: - individual indices for countries are calculated using the Laspeyres [1] formula, which is effectively an arithmetic mean of weighted prices of different products, not a geometric mean - the individual indices of countries are then "aggregated" by calculating the geometric mean That'd mean that outlier countries would not move the average much so there you'd have underestimation of inflation to a certain degree. But it wouldn't mean that individual products/components of the consumption basket that significantly increased in price would be undererstimated through the geometric mean. Right? Just calculating a geometric mean of countries' indices to get an index for EU wouldn't make much sense, though .. they'd have to weigh the indices with population, GDP or total consumption. So the actual calculation to get the HICP is surely more complicated than that. But if they really use Laspeyres then the underestimation due to geometric mean shouldn't be an issue here. [1] https://en.wikipedia.org/wiki/Price_index#Paasche_and_Laspeyres_price_indices https://en.wikipedia.org/wiki/Price_index#Paasche_and_Laspey...

by veave 3y ago

carlmr 3y ago

My energy bill is up from 32 c per kWh pre-pandemic to 37 c per kWh now. Gasoline was 1.79 yesterday and was about 1.70 pre-pandemic. Food prices have risen, but some more some less, but 50% seems too high. But maybe Germany is different.

rasz 3y ago
Stupid Nestle cornflakes went 50% up in last 12 months, same for the milk.
- carlmr 3y ago
  Don't buy Nestlé then? I'm also not doubting that some products went up by 50%. My point is rather that most products I buy have remained surprisingly stable in price.

jjgreen 3y ago

This is by design. All of Europe has now followed the UK's lead in preferring the geometric mean over the arithmetic [1]. The philosophical justification for this is that when some products become more expensive relatively, then the consumer will switch to products which have a higher utility-to-cost ratio, so are less affected by the change. That's all bollocks of course, the real reason is the geometric-arithmetic mean inequality: for any set of positive numbers a,..., GM(a, ...) <= AM(a,...). So your way forward is clear: eat less food, use less heat, buy more surfboards (or whatever it is which hasn't gone up as much). [1] https://ec.europa.eu/eurostat/statistics-explained/index.php?title=HICP_methodology#Computation_issues https://ec.europa.eu/eurostat/statistics-explained/index.php...

veave 3y ago
lmao... so olive oil now costs double what it costed a couple of years ago... are they telling me I should switch to canola so my costs increase by 5.5% only? These people really deserve to end like the French monarchy.
- jjgreen 3y ago
  ... or melt down some margarine ...
  - NikkiA 3y ago
    Don't worry, you don't even need to use any energy for that, the heatwaves will sort it for you.
- ephbit 3y ago
  Isn't canola hugely more beneficial than olive oil in terms of nutrition anyway? Wondering how the mediterranean countries succeeded in marketing olive oil as especially valuable/healthy oil.
ephbit 3y ago
Your linked site states: > The harmonised indices shall be annually chain-linked Laspeyres-type indices. And further down: > Elementary aggregate indices for the HICPs are computed as the ratio of the geometric average of prices or the ratio of the arithmetic average of prices. The arithmetic mean of price relatives may only be applied in exceptional cases and where it can be shown to be comparable. I read this as: - individual indices for countries are calculated using the Laspeyres [1] formula, which is effectively an arithmetic mean of weighted prices of different products, not a geometric mean - the individual indices of countries are then "aggregated" by calculating the geometric mean That'd mean that outlier countries would not move the average much so there you'd have underestimation of inflation to a certain degree. But it wouldn't mean that individual products/components of the consumption basket that significantly increased in price would be undererstimated through the geometric mean. Right? Just calculating a geometric mean of countries' indices to get an index for EU wouldn't make much sense, though .. they'd have to weigh the indices with population, GDP or total consumption. So the actual calculation to get the HICP is surely more complicated than that. But if they really use Laspeyres then the underestimation due to geometric mean shouldn't be an issue here. [1] https://en.wikipedia.org/wiki/Price_index#Paasche_and_Laspeyres_price_indices https://en.wikipedia.org/wiki/Price_index#Paasche_and_Laspey...