How To Lie With Statistics (2022 Inflation Edition)

Everybody should read How To Lie With Statistics (or a similar math-based critical thinking book). 

The inflation reports of 2022 have been near weaponized by people on all sides of the political spectrum, and just being able to think critically is essential. 

One lesson you can get from the book or elsewhere is how to understand rate of change based arguments. 

The inflation rate from July of 2022 is 0% if you’re saying the relative growth rate hasn’t changed. At the same time, it is also over 8% if you’re looking at it on an absolute basis, relative to where it was a year ago. 

As I saw it explained online (to make this absolute/relative explanation super clear, h/t Nick Maggiulli, @dollarsanddata), if you weighed 200lbs a year ago, but today you weigh 217lbs, your weight has gone up by 8.5% over the past year. If you weighed 217lbs last month and still weigh 217lbs this month, that’s a 0% monthly change. 

So if someone wants you to believe inflation is high, they’ll tell you the 8.5% number, and if they want you to believe it’s falling, they’ll tell you the 0% number, and if you’ve read How to Lie With Statistics (or Nick’s tweet) you’ll know to look for both numbers and figure out what matters to you. 

Critical thinking. Still the most important skill to making sure you are primarily in control of the fleece you are choosing to put over your eyes.