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My bad. I mistakenly assumed that you had a firm enough grasp of statistical analysis to understand "statistical fallacies" and quickly spot the "rate of change fallacy." Here's a link to an article that should better elucidate the concept for you... http://www.statlit.org/pdf/2008KlassASA.pdf
Considering that the State of Hawaiʻi Department of Business, Economic Development & Tourism (DBEDT) uses the "Honolulu Consumer Price Index (CPI)" as a "proxy" to calculate the inflation rate, Iʻd love to see 100 years of Honolulu CPI data.
Based on the Honolulu CPI data from 1993 to 2013, the annual inflation rate averaged 2.38%. During that same period of time, the annual inflation rate of the United States averaged 2.45%.
Thanks. I downloaded the PDF. The one thing that was of most value was the "cherry picking" section of the paper. An area which you could use help in 20 years of data is nothing. And pooling from a period with (historically) low inflation is great at making an argument until someone calls out the obvious cherry picking.
Pardon my ignorance but I use inflation data as a guide and nothing more. CPI, COL Index, etc etc aren't very useful because the data focuses on very short periods and they all (individually) paint a very inaccurate picture of what is really happening price-wise in the area because of wild swings in energy costs, shipping, commodity pricing, etc. It's only when you combine all the data and determine how far you can stretch your dollar (i.e. how much value has your dollar LOST) is when there is any useful value to the numbers, IMO. Our exorbitant real estate prices alone often skew the data tremendously; this paints a very inaccurate picture for those using that data.
For folks that know what they're doing, twenty years worth of economic data is enough to create a decent forecasting model. Hopefully, you know how to use a spreadsheet and financial calculator to help analyze statistical data.
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Originally Posted by pj737
Also, a lot of the information I provide on these forums is anecdotal. Meaning I am basing my posts on my personal experience as well as experience from friends, colleagues, family, etc etc. I have been living here my entire life and over the decades I've amassed quite a bit of information based on experience and conversations with many locals. People can take my opinion with a grain of salt but I think numbers provided by actual life-long residents is a heck lot more valuable and useful than government-assessed data.
Although anecdotal evidence is entertaining, it often leads to faulty generalizations. I'm a kanaka maoli that was born and raised on the Big Island who just happens to know how to do a little research and analyze data.
For folks that know what they're doing, twenty years worth of economic data is enough to create a decent forecasting model. Hopefully, you know how to use a spreadsheet and financial calculator to help analyze statistical data.
Disagree. 20 years is not long enough when we have data that spans over a century.
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Although anecdotal evidence is entertaining, it often leads to faulty generalizations. I'm a kanaka maoli that was born and raised on the Big Island who just happens to know how to do a little research and analyze data.
I don't consider a lot of the govt-issued figures because they can be very misleading. CPI, for example, excludes housing prices, food and energy. To say that you think data that excludes such critical items should have ANY value to those that reside in Hawaii is rather silly. My data is the money I spend every month when compared to the money I spend last month, last year, 5 years, ago, 10 years ago, etc. I actually have an extensive log of expenditures on everything from rent to drywall to milk over a very long period of time.
Anecdotal evidence doesn't mean I just take what people say at face value and then blindly regurgitate it. I'm (barely) smart enough to weed out information that is generally a result of emotion and misinterpretation which is common when people discuss costs of anything.
Prices on the Big Island can vary greatly from that on Oahu. My parents built a home in Volcano (GORGEOUS home with no neighbors close by; I wish they didn't sell). I'd visit there as a young adult and used to be blown away at how pricey everything is there compared to the city. Housing was the only thing cheap up there but that wasn't what I was buying at my age. LOL
Disagree. 20 years is not long enough when we have data that spans over a century.
On the other hand, data that is more than 20 years old tends to be irrelevant to current experience in many arenas, especially where disruptive technologies have the most reach.
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I don't consider a lot of the govt-issued figures because they can be very misleading. CPI, for example, excludes housing prices, food and energy.
The Bureau of Labor would disagree.
Quote:
CONSUMER PRICE INDEX – APRIL 2014
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.
The indexes for gasoline, shelter, and food all rose in April and contributed to the seasonally adjusted all items increase. The gasoline index rose 2.3 percent; this led to the first increase in the energy index since January, despite declines in the electricity and fuel oil indexes. The food index rose 0.4 percent for the third month in a row, as the index for meats rose sharply.
The index for all items less food and energy rose 0.2 percent in April, with most of its major components posting increases, including shelter, medical care, airline fares, new vehicles, used cars and trucks, and recreation. The indexes for apparel, household furnishings and operations, and personal care were all unchanged in April.
On the other hand, data that is more than 20 years old tends to be irrelevant to current experience in many arenas, especially where disruptive technologies have the most reach.
The Bureau of Labor would disagree.
Yes, that is correct. It was the CORE CPI that does not include food and energy... but that is the number most widely used.
I stated housing prices, not shelter. Shelter does NOT include real estate values. Yes, it includes rents but that is very different from housing prices. This skews data in areas where home prices are exorbitantly high (like Hawaii) and fluctuate wildly over 2-5 years... while rents are generally relatively stable (i.e. slow increases) or flat.
I stated housing prices, not shelter. Shelter does NOT include real estate values. Yes, it includes rents but that is very different from housing prices.
Also incorrect. The CPI algorithm for shelter includes both typical rentals and privately owned residences, expressed as rental equivalence.
Of course no statistical study is foolproof or flawless, but systematic objective data gathering provides a valuable reality check to weigh against the vagaries of subjective and anecdotal opinions.
Also incorrect. The CPI algorithm for shelter includes both typical rentals and privately owned residences, expressed as rental equivalence.
Of course no statistical study is foolproof or flawless, but systematic objective data gathering provides a valuable reality check to weigh against the vagaries of subjective and anecdotal opinions.
Wrong. CPI only includes rent of primary residence and owners' EQUIVALENT rent. There is zero inclusion of property VALUATIONS.
Disagree. 20 years is not long enough when we have data that spans over a century.
Keep in mind that Hawaiʻi has only been a U.S. state since 1959, the military build up for a war in Vietnam is unlikely to happen again, and that the internet won't be invented again. Moreover, Hawaiʻi is not exactly the "isolated backwater" that it used to be. It's only within the last 20 or so years that Wal-Mart, Target, Costco, Sam's Club, Home Depot, Lowe's and other major retailers from the continental U.S. have altered the retail environment here. Most folks no longer have to settle for a locally-based retailer's "take-it-or-leave-it" price for a particular item when they can go to a "big box" store or order it from the internet. It's silly to discuss how much money one can save by using "Amazon Prime" to ship things here, on the one hand, while attempting to argue that data from over 50 years ago is still relevant.
Quote:
Originally Posted by pj737
I don't consider a lot of the govt-issued figures because they can be very misleading. CPI, for example, excludes housing prices, food and energy. To say that you think data that excludes such critical items should have ANY value to those that reside in Hawaii is rather silly. My data is the money I spend every month when compared to the money I spend last month, last year, 5 years, ago, 10 years ago, etc. I actually have an extensive log of expenditures on everything from rent to drywall to milk over a very long period of time.
I'm quite aware of the limitations of data compiled by the U.S. and State of Hawaiʻi governments. Unfortunately, that data is what government policymakers and folks in academia use for economic "reports" and "forecasts." I have detailed logs of expenditures from my ʻohana dating back to the days of Kamehameha III. While it's of historical interest, it's not particularly useful when it comes to economic forecasting.
Quote:
Originally Posted by pj737
Anecdotal evidence doesn't mean I just take what people say at face value and then blindly regurgitate it. I'm (barely) smart enough to weed out information that is generally a result of emotion and misinterpretation which is common when people discuss costs of anything.
I view anecdotal evidence as "flavoring" to enhance statistical data. While "anecdotal evidence" isn't reproducible enough to stand on its own merits, it can add a nice narrative to dry, statistical data.
Quote:
Originally Posted by pj737
Prices on the Big Island can vary greatly from that on Oahu. My parents built a home in Volcano (GORGEOUS home with no neighbors close by; I wish they didn't sell). I'd visit there as a young adult and used to be blown away at how pricey everything is there compared to the city. Housing was the only thing cheap up there but that wasn't what I was buying at my age. LOL
Not only do prices for assorted items vary greatly from island to island, they vary greatly in different parts of the same island. For instance, housing, groceries, and gasoline tend to be cheaper on the Hilo side of the Big Island than the Kona side. Similarly for Oʻahu, housing, gasoline, and groceries tend to be cheaper in Waiʻanae than in Kailua.
I'm quite aware of the limitations of data compiled by the U.S. and State of Hawaiʻi governments. Unfortunately, that data is what government policymakers and folks in academia use for economic "reports" and "forecasts." I have detailed logs of expenditures from my ʻohana dating back to the days of Kamehameha III. While it's of historical interest, it's not particularly useful when it comes to economic forecasting.
Question - what previously-established data is particularly useful to economic forecasting if we are in a constantly changing world (economically/socially/etc) that nobody can accurately predict?
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20 years of data is nothing. And pooling from a period with (historically) low inflation is great at making an argument until someone calls out the obvious cherry picking.
