Saturday, July 10, 2010

Oh, That's a Laugh

Looking into median family income while reviewing some Krugman posts, I find this in Wikipedia [7-2-2010] under "Household income in the United States" --

In 2007, the "real" (adjusted for inflation) median annual household income rose 1.3% to $50,233.00 according to the Census Bureau.

When you figure "real" values, they are always based on a base year: Real values are always given relative to some starting point. If you change the base year, you change the numbers that are reported as "real." So the $50,233.00 number is meaningless.

Assuming some minimal inflation, you can make "real" values sound higher by moving the base year closer to the present. You can make "real" values sound lower by moving the base year farther into the past.

It is perfectly fine to say "income rose 1.3%" from the previous year, or from some previous date. But it is utterly meaningless for Wikipedia to put a dollar amount there. The article fails to identify the base year.

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