From the Washington Post :
Americans are keeping their vehicles longer despite an uptick in the average family income, according to federal data. The Bureau of Labor Statistics said in an analysis published this month that
the average age of household autos increased from 10.1 years about 11.3
years between 2007 and 2012, while the average household income rose
from $63,091 per year to $65,596 during the same period.
The share of newer vehicles, or those less than 5 years old, dropped
from 22 percent to 15 percent during that timeframe, while the
proportion of older autos, or those manufactured at least 11 years ago,
jumped from 34 percent to 42 percent.
People are reacting to stagnant or lower incomes. Median income would be a better measure here.
Federal Data: Americans keeping vehicles longer since start of recession
Statistics do not always tell the story. They just measure a certain set of data. I think it's not a bad thing that many Americans aren't buying new cars. They depreciate in value quickly, and honestly there is no real need for a new car as opposed to a used car that runs well.
ReplyDeleteI agree that median income is a much better measure of how the average American is doing. Joe Stiglitz says inthat GDP per capita is not a reliable measure of economic well being at all because all of that money is concentrated at the top; none of the people in the middle class or lower class (which are, by the way, virtually indistinguishable) have anything close to what the one percenters have. In this way, measures of average income conceal the destitution of the poor with the mega-affluence of the super rich.
ReplyDeleteI think statistics is like accounting in that both can be used to paint/fabricate a story, and this can be very dangerous if the wrong people are interpreting these things. I do not think the general public has a very good understanding of either of these disciplines, and that allows the discussion about these issues to remain sequestered to a select group of people.
ReplyDeleteAverage income doesn't portray anything about a society. If one person earns a billion dollars in a year then he alone can bring the income of 30,000 people who earn nothing to about $34,000 dollar per year. Human Development Index was supposed to be the solution for this because measures income, life expectancy and education but I still think it has flaws as one factor can heavily influence the other ones.
ReplyDeleteThere is no point in using mean to represent a population that have too many extreme values or outliers. It is however a convenient measure that people can misuse and misinterpret. I agree that median income would be a better option and reflection of the "well-being" of american household.
ReplyDeleteIts interesting that an increase in disposable income is associated with changing car faster. There seems to be an implicit suggestion that people are supposed to consume and change what they have for the sake of changing rather than due to their needs. Cars is not a product that you buy frequently even if you have slightly more money especially when the cars still run well. The correlation seems a bit weird to me.
Using the average income as a measure of improvement in standards of living is very problematic. I do agree that the median gives a better representation on those improvements in people's lives. However, this data can also be manipulated or misused to suit the perceptions of the individuals collecting this data. There is need to question the source of the data, who collected this information and how they gathered the data to come to a sound and well-informed conclusion. I do agree with Ustav that there is need to incorporate other factors, such as life expectancy, infant mortality, education and healthcare, to accurately measure how an improvement in income affects those aspects of life.
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