We use averages to smooth over distortions in one area to get a better idea of what’s going on more broadly
“we” are using a different meaning of the word average I think. When I say mean, the point is to give an idea of where the “center” of the dataset is, not what the dataset is shaped like.
Misuse of Statistics: Using numbers in such a manner that – either by intent or through ignorance or carelessness – the conclusions are unjustified or incorrect.
the often overlooked fact that the mean does not provide any information about the shape of the probability distribution of a data set or skewness, and that decisions or analysis based on only the mean—as opposed to median and standard deviation—may be faulty.
Are you implying the average person doesn’t understand averages?
That’s an interesting thing to say. Tell me more about that.
When I say mean, the point is to give an idea of where the “center” of the dataset is, not what the dataset is shaped like.
Inflation is a measure of how the value of money changes over time, and the point is to guide monetary policy to increase or decrease the supply of money. The main impact of inflation measures is to impact borrowing rates, since that’s the principle driver of money supply.
Inflation measures are not intended to measure how much eggs cost or what to expect your grocery bill to look like. It can be used for that, but a single number will never be sufficient.
A 2.7% inflation doesn’t mean everything is around 2.7% more expensive, it means that if you look at the average spending across all areas for an average person (again, not an actual person, but the mean), they will spend 2.7% more this year vs last. That could be from rent, groceries, sporting goods, etc. How much you are impacted depends on what areas you spend more in. If eggs are up and you’re vegan, you won’t be impacted much at all, but if beans are up, you’ll be impacted more than most.
Prices fluctuate for a variety of reasons, inflation just indicates how much of that is likely due to money being devalued.
“we” are using a different meaning of the word average I think. When I say mean, the point is to give an idea of where the “center” of the dataset is, not what the dataset is shaped like.
https://en.wikipedia.org/wiki/Misuse_of_statistics
https://en.wikipedia.org/wiki/Tyranny_of_averages
That’s an interesting thing to say. Tell me more about that.
Inflation is a measure of how the value of money changes over time, and the point is to guide monetary policy to increase or decrease the supply of money. The main impact of inflation measures is to impact borrowing rates, since that’s the principle driver of money supply.
Inflation measures are not intended to measure how much eggs cost or what to expect your grocery bill to look like. It can be used for that, but a single number will never be sufficient.
A 2.7% inflation doesn’t mean everything is around 2.7% more expensive, it means that if you look at the average spending across all areas for an average person (again, not an actual person, but the mean), they will spend 2.7% more this year vs last. That could be from rent, groceries, sporting goods, etc. How much you are impacted depends on what areas you spend more in. If eggs are up and you’re vegan, you won’t be impacted much at all, but if beans are up, you’ll be impacted more than most.
Prices fluctuate for a variety of reasons, inflation just indicates how much of that is likely due to money being devalued.
yeah thanks i don’t need a primer on federal reserve monetary policy from the guy who thinks “smoothing distortions over a region” and [compressing the entire dataset to a single point approximating the center of that dataset] are equivalent statements. i talked about what it was actually good for not what it is being used for.
edit: turned false quotation into paraphrase, clarity, added links