Statistically Speaking

Statistically Speaking

We are in a time of information overload, and countless data dumps that infiltrate our television news casts, newspaper reports and internet blogs that contain statistics and information provided by government agencies, consumer awareness organizations, and educational institutions. Because we read about it or see in on television we can fall into the trap of assuming what we are absorbing through these information vessels is true and accurate.

It is our right as Americans to question and challenge information including the information and statistics that are provided by our government. Case in point is, the government provides census data from the Bureau of Labor and Statistics. There are countless pages of information that the government uses to develop economic strategies and set policies.

One example is the Consumer Price Index (CPI) Currently the Federal Government, under the Department of Labor and Bureau of Labor Statistics (BLS), utilizes the CPI as a key indicator to assist in measuring the nation’s economic strength. The CPI measures the price variance of a “market basket” of goods and services to urban consumers. There are over 200 categories within eight major groups: Food and Beverages, Housing, Apparel, Transportation, Medical Care, Recreation, Other Goods and Services, and Education and Communication These price variance measurements are captured monthly in predetermined metropolitan markets and the Federal Government uses this data to help determine the state of the economy through consumer spending, its effect on inflation, and creates strategies to change or alter the economic environment.

There is much debate about how this data is interpreted and its methodology. For example, rural residents are not part of the collection surveys. Also, goods and services, part of the “market basket”, do not always represent actual consumer spending. For example, food and energy expenses are not calculated as part of “Core CPI” that is reported to congress. During times of over inflated energy expense – about 1 year ago, it does not accurately reflect the cost of everyday living. 80 million Americans who receive government checks and support, including social security recipients, military personnel, and the subsidizing of school lunch programs are affected by a high inflation report or a higher than normal CPI rate – they would receive an increase in pay/support.

Because of the relevance of CPI to direct compensation, and the fact that the Government is directly accountable for dispersing the affected compensation, it brings into question the objectivity of the Government when determining the true cost of living.

The point is most everything we read or watch is subject to some form of bias. We as a democratic society need to interpret all information that we are exposed to with an objective, inquisitive view, including government provided statistical information that we assume is non-biased.