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r/badeconomics has a recap on why this is just a freshman bad statistics take: https://www.reddit.com/r/badeconomics/comments/i9ycy9/the_brutalist_housing_block

r/badeconomics has a recap on why this is just a freshman bad statistics take: https://www.reddit.com/r/badeconomics/comments/i9ycy9/the_brutalist_housing_block_sticky_come_shoot_the/g1qr7z6/ https://www.reddit.com/r/badeconomics/comments/i9ycy9/the_br...

SilasX 3y ago
Can you be more specific? That's a long, nuanced reply that suggests several legit explanations that account for some of the trends, none of which look like dismissing the whole thing as bad statistics, like you're claiming.[1] If anything, it agrees that "something happened" around 1971, and suggests multiple such things. [1] Edit: to me, "freshman bad statistics" means something like "the supposed trend is an artifact of how it was measured or transformed", but the link doesn't say anything like that -- this label is misleading at best.
- ls612 3y ago
  The main thing is that this is entirely because they choose CPI instead of PCE to measure inflation. Also it compares a median (wages) to a mean (productivity).
  - SilasX 3y ago
    Yes, that's used to dismiss the significance of some of the asserted trends. But it also agrees that inflation really did go up: >>The change in the trade deficit (graphs 15 & 16) may be linked to the end of Bretton Woods indirectly. The end of the system created floating exchange rates. That allowed every nation to determine it's own monetary policy fully. When that happened many Central Banks behaved badly causing high inflation. The US stopped it's high inflation in the 1980s. And other real phenomena account for other trends c. 1971: >>Graph 3 is tricky. It shows how Real GDP per capita has moved away from real GDP per employee. The main reason for that is the introduction of women to the workplace. And it also agrees that some of the trends did happen, meriting investigation, but 1971 wasn't the inflection point: >>Take a look at graphs on inequality. Here I'm looking mostly at graphs 1, 6, 8, 9, 10. Notice that the inflection point isn't actually 1971. It's usually some time in the early 80s. Greater inequality between high income earners and everyone else started around then. It's a matter of debate why. A lot of economists believe it's because the modern developed economies rewards high skills more than they did in the past. Notice that the very first graph is misleading because it doesn't use total compensation. I have a hard time characterizing any of that as a "freshman statistics error".
hyperfuturism 3y ago
I don't get it. Has the wages not been stagnating, and has house prices not been creeping up, has US national debt not been going exponential, has energy consumption not been relatively more flat? For example, the comment mentions that the the "Median Sale prices for new houses sold" is in dollars. Yes, he is correct. But looking up an inflation adjusted median price gives the same result, that house are more expensive than before. So yes, he is right that the graph can be technically misleading, but the point of "WTF Happened in 1971" still stands. I think there are many midcurve takes, where one would argue how 1971 is wrong, but isn't it the case, in reality - that housing, college, wage, etc. have all been doing worse for a few decades now.
- akgoel 3y ago
  Up until 2017, the price of a house had been creeping up, but so had the size of the median house. One you adjust for inflation and square foot, it was pretty steady.[0] [0] https://www.supermoney.com/inflation-adjusted-home-prices/ https://www.supermoney.com/inflation-adjusted-home-prices/
  - ZoomerCretin 3y ago
    This has absolutely no relevance to housing prices. I can't go to a store, see that 2k square feet is too much, and ask for 500 square feet. Housing is all or nothing. You either rent or buy an entire unit, or none of it. There is no option to rent 500 square feet because it's illegal in most cities to have units smaller than 600-750 square feet.
    - mikhailfranco 3y ago
      Why illegal? Cui Bono
      - Nasrudith 3y ago
        Like most of the housing crisises: racists mostly. Because for a glorious-to-them moment in time they could keep minorities and other undesirables priced out.
roflyear 3y ago
Agreed, showing things on a non-log scale seems to skew it significantly.
refurb 3y ago
Yup, that website has been around for a while and many critiques have been done calling out the selective use of statistics and making conclusions not supported by them (by ignoring the limitations or confounding factors).

SilasX 3y ago

Can you be more specific? That's a long, nuanced reply that suggests several legit explanations that account for some of the trends, none of which look like dismissing the whole thing as bad statistics, like you're claiming.[1] If anything, it agrees that "something happened" around 1971, and suggests multiple such things. [1] Edit: to me, "freshman bad statistics" means something like "the supposed trend is an artifact of how it was measured or transformed", but the link doesn't say anything like that -- this label is misleading at best.

ls612 3y ago
The main thing is that this is entirely because they choose CPI instead of PCE to measure inflation. Also it compares a median (wages) to a mean (productivity).
- SilasX 3y ago
  Yes, that's used to dismiss the significance of some of the asserted trends. But it also agrees that inflation really did go up: >>The change in the trade deficit (graphs 15 & 16) may be linked to the end of Bretton Woods indirectly. The end of the system created floating exchange rates. That allowed every nation to determine it's own monetary policy fully. When that happened many Central Banks behaved badly causing high inflation. The US stopped it's high inflation in the 1980s. And other real phenomena account for other trends c. 1971: >>Graph 3 is tricky. It shows how Real GDP per capita has moved away from real GDP per employee. The main reason for that is the introduction of women to the workplace. And it also agrees that some of the trends did happen, meriting investigation, but 1971 wasn't the inflection point: >>Take a look at graphs on inequality. Here I'm looking mostly at graphs 1, 6, 8, 9, 10. Notice that the inflection point isn't actually 1971. It's usually some time in the early 80s. Greater inequality between high income earners and everyone else started around then. It's a matter of debate why. A lot of economists believe it's because the modern developed economies rewards high skills more than they did in the past. Notice that the very first graph is misleading because it doesn't use total compensation. I have a hard time characterizing any of that as a "freshman statistics error".

hyperfuturism 3y ago

I don't get it. Has the wages not been stagnating, and has house prices not been creeping up, has US national debt not been going exponential, has energy consumption not been relatively more flat? For example, the comment mentions that the the "Median Sale prices for new houses sold" is in dollars. Yes, he is correct. But looking up an inflation adjusted median price gives the same result, that house are more expensive than before. So yes, he is right that the graph can be technically misleading, but the point of "WTF Happened in 1971" still stands. I think there are many midcurve takes, where one would argue how 1971 is wrong, but isn't it the case, in reality - that housing, college, wage, etc. have all been doing worse for a few decades now.

akgoel 3y ago
Up until 2017, the price of a house had been creeping up, but so had the size of the median house. One you adjust for inflation and square foot, it was pretty steady.[0] [0] https://www.supermoney.com/inflation-adjusted-home-prices/ https://www.supermoney.com/inflation-adjusted-home-prices/
- ZoomerCretin 3y ago
  This has absolutely no relevance to housing prices. I can't go to a store, see that 2k square feet is too much, and ask for 500 square feet. Housing is all or nothing. You either rent or buy an entire unit, or none of it. There is no option to rent 500 square feet because it's illegal in most cities to have units smaller than 600-750 square feet.
  - mikhailfranco 3y ago
    Why illegal? Cui Bono
    - Nasrudith 3y ago
      Like most of the housing crisises: racists mostly. Because for a glorious-to-them moment in time they could keep minorities and other undesirables priced out.

roflyear 3y ago

Agreed, showing things on a non-log scale seems to skew it significantly.

refurb 3y ago

Yup, that website has been around for a while and many critiques have been done calling out the selective use of statistics and making conclusions not supported by them (by ignoring the limitations or confounding factors).