Friday, November 16, 2007

The Devil's Kitchen: Drinking, charities and state-funded corruption

I made a small comment over on Devil's Kitchen which upon re-reading needs expansion.

The BBC has reported that the Health Alcohol Alliance (which is really the Alcohol Health Alliance UK ) is muttering about alcohol blah blah. Okay no interest in that, what I am interested in is the graph used to show risks

Now this should be easy, you have one set of lines going upwards (A) and one set (B) holding steady. So only two* possible conclusions can be drawn here, either B has a cumulative effect on A (think pesticide-use against birth defects), or B has no affect on A. As we're measuring prices here and not dealing with cumulative events we plump for choice two. Except they're trying to show there is a relation, how?

Check the small print at the bottom

Cost of beer/wine has remained relatively constant since 1996, but in reality has become more affordable as income has increased.
Ah so line B is really declining; so why don't you show this? It's easy enough, you take the CPI (Consumer Price Index) for alcohol, start with a base and compare the two. Okay a teeny bit of maths now.

If I say the price of a 'lump' of alcohol in 2005 was £3 what should it have been in 1996 in real terms? Using CPI I get a figure of £2.20. So if the actual price was lower then alcohol has increased in price, if it's higher then the price has decreased. We can plot another imaginary line on the graph (C) real cost starting with £2.20 in 1996 and heading to £3 in 2005 with all the points in-between. With that we can draw one final imaginary line which is the difference between B and C. If the actual price is steady and the real-price is inclining then the difference is declining i.e. alcohol really is getting cheaper.

So here's the question - if you want to show a relationship between something increasing as something decreases which line would you use, the steady actual price or the declining difference in price?

So why do they use the steady actual price? Well only two possibilities spring to mind 1) the difference in price is so minor that it's better just to say the price declines without showing it or 2) they don't know about CPI or how to calculate it. In either case why should we be using this graph?

*okay three possibilities the third being you're comparing apples to oranges and shouldn't have these two items on the same graph at all

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