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View Diary: Historical data suggest inflation hurts the rich more than the poor (24 comments)

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  •  where to start... (1+ / 0-)
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    (1) Correlation does tell us the extent to which the two quantities vary together.  The slope of that line matters, though, and it matters more for the folks at the low end.  If CPI goes up 5%, but incomes go up 4%, guess what?  That's bad.  And it's more bad for folks at the low end of the income spectrum.  Which leads to

    (2) The problem is non linear.  A person making 20k/yr who receives a $500 gift is impacted much more by that event than is someone making 20 mill/yr.  For the Donald, the expenditure of his high priced calories may not make it worth it for him to burn them to pick up a benjamin on the street.

    (3) to emphasize, a loss of 5k/yr for someone making 200k/yr, while somewhat painful, is nothing compared to the loss for someone making 50k.

    (4) The sizes of these correlations are a little low to make strong claims of impact.  0.7 means half the variance in salary is "explained" by variance in CPI.  What about the other half of that variance?

    "Don't tell me what you believe. Tell me what you do and I'll tell you what you believe. "

    by bubbanomics on Mon Aug 15, 2011 at 09:29:51 AM PDT

    •  what evidence would convince you (0+ / 0-)

      that inflation does or does not hurt the poor more than others? Not theories. Not hypothetical examples. Evidence. Data. What would it take?

      " 'In this world, Elwood, you must be oh so smart or oh so pleasant.' Well, for years I was smart. I recommend pleasant. You may quote me." Elwood P. Dowd

      by paulbkk on Wed Aug 17, 2011 at 05:37:51 AM PDT

      [ Parent ]

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