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The Good News Times strikes again
Aug 2007
My neck hurts. The article in the Straits Times made me do such a
sudden double-take, I must have suffered whiplash. I had to read it
three times over, and slowly, to grasp what exactly it was trying
to report, for the opening sentence was, at first sight, quite
misleading.
I wasn't the only one who thought so, apparently. In an online
comment on the Straits Times site, someone with the monicker
ashvint wrote, "This is a very strange analysis."
The opening of the news story said,
30 August 2007
Straits Times
Inflation gap narrows between bottom and top income groups
By Nicholas Fang
While prices for Singaporeans staged their biggest monthly increase
in 12 years last month, people in the lowest income groups saw a
far lower rate of inflation in the first six months of the year
than in the same period last year.
If you're not careful, you'd get the sense that although inflation
reached a peak, the poor suffered less -- and then your mind fills
in the blank: than the rest. "Far lower rate of inflation" it
says.
How convenient that is to burnish the credentials of the government
for the welfare of the underprivileged, though already, you're
disoriented because that sentence doesn't seem to address the same
thing as the headline. The former speaks of a comparison across
time, the latter hints at a comparison between subsets.
Even within the first sentence itself, you can trip up. The problem
lies in the juxtaposition of unrelated elements. The first half of
the sentence -- "While prices for Singaporeans staged their biggest
monthly increase in 12 years last month" -- refers to the the
increase in the Consumer Price Index during July 2007. It was 2.6
percent over the same month a year ago.
The second half of the sentence doesn't relate to July at all. It
relates to a different time period: Jan-June. And neither the first
nor second part of the sentence had any relation with the headline
that mentions the "top income groups".
You continue reading.
Latest figures out yesterday show that the consumer price index
(CPI) for the bottom 20 per cent of the population by income rose
1.1 per cent.
This compares with the 2.2 per cent rise for the January-to-June
period last year.
Again, you see more good news. The bottom quintile (i.e. 20 percent
block) suffered only half as much inflation during the first half
of 2007 as they did a year ago.
And then you read,
The Department of Statistics (DOS) numbers also show that the gap
between the inflation rates of this segment and the top 20 per cent
of the population by income narrowed to 0.4 percentage point. This
is the smallest difference seen in four years.
Prices for higher income households rose 0.7 per cent in January to
June over the corresponding period last year.
Zero point seven? Wait... what's zero point seven? And then it
slowly sinks in. That's the inflation rate suffered -- if
"suffered" is the right word -- by the topmost quintile.
Is there a typographical error? You wonder. Fortunately, the
Straits Times had a table alongside, which I reproduce here:
CHANGES IN CONSUMER PRICE INDEX
Income group
Period General Households* Lowest 20% Highest 20%
2004 1.7 2.3 0.3
2005 0.5 1.3 -0.1
2006 1.0 1.8 0.4
2007 0.8 1.1 0.7
(Jan-Jun)
Source: Sg Dept of Statistics
Notes: Changes based on year 2004.
* Refers to the central 90% of households by expenditure
in 2002/2003 Household Expenditure Survey.
Four seconds later, you reel in shock. What is the most striking
thing about the figures? That for three-and-a-half years the poorer
households have suffered inflation far more than the average and
the rich.
For the lowest quintile, the compounded price increase from Jan
2004 to June 2007 was 6.7%. On the other hand, for the highest
quintile, compounded price increases amounted to 1.3% over the same
period.
Readers may recall that the bottom 10% of households in the period
2000 - 2005 had virtually no income, and the next 10% saw household
income fall 19.7%. See details in the article Income inequality
widens markedly.
During that same 5-year period, the top decile (i.e. the top 10%
block) saw their household income increase 14.8%, and the next
richest decile gained 12.5%.Yet these are the ones who hardly saw
inflation affect them.
You would think, wouldn't you, that a more appropriate headline and
lead sentence would be something like "Bottom income groups suffer
markedly more inflation than top ones"? Because really, that's what
the table as a whole shows, doesn't it?
Instead the Good News Times squints into the 0.4 difference between
the figures "1.1" and "0.7" on the last row of numbers in order to
proclaim "Hail the benevolent king!"
© Yawning Bread
