The cost of living

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monkey
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Re: The cost of living

Post by monkey » Wed Jan 26, 2022 7:27 pm

More or Less had Jack Monroe on discussing this (with a a couple of others) - clicky (2nd item, after the with/of Covid debunking)

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Re: The cost of living

Post by lpm » Wed Jan 26, 2022 7:47 pm

Please please tell me she didn't repeat her dud rice "statistic".
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Re: The cost of living

Post by monkey » Wed Jan 26, 2022 8:01 pm

lpm wrote:
Wed Jan 26, 2022 7:47 pm
Please please tell me she didn't repeat her dud rice "statistic".
Listen to it yourself. I already did better than your usual by linking to it :P


(She read her tweet thread out to introduce stuff, then they talked about how inflation is measured. They had someone say "well, it's skewed by what different supermarkets do", she countered with, "but what if I only have one to go to or very little time", A guy from the IFS said she might be right, because of how CPI is calculated, but the ONS should be able to do better in the future because of what they're working on.

It pretty much summed up the story, where a campaigner noticed something (or thought they did), starts a campaign, and gets the people who know how to do stuff to go "yeah, might be something in that, but we'll be able to look into that in the future - which seems to be what you want to be done.)

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Re: The cost of living

Post by Bird on a Fire » Wed Jan 26, 2022 8:26 pm

I think the Vimes Boot analogy really applies here.

If you have some extra time/resources/capital, you can check multiple shops, order online, etc.

If you're stuck using whatever's in the one shop you can walk to that's open, your options are very limited.

The supermarket stocking algorithms take account of local competition when deciding what to stock.

Being poor is expensive, which is the whole point of the Vimes Boot thing. It doesn't matter what you could order online if you've got £20 to last the six weeks till your benefits are fixed. It matters what's in the corner shop.

It's an interesting, if IMHO secondary, question as to whether the changes Monroe noticed are due to potential nationwide availability via the internet, or how the shops where she lives are stocked.
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Re: The cost of living

Post by IvanV » Wed Jan 26, 2022 8:36 pm

Supermarkets are well known to carry out a practice called Loss leading, deliberately selling certain items below cost to attract the customers in. These prices do not reflect the true costs of items being sold. If a supermarket should decide to cease loss leading with a certain item, it may result in a large price increase for that item, in that supermarket. But who can really complain that they have now decided to stop making a deliberate loss on it?

It looks like JM has created her shopping basket out of a few super-cheap items, which inevitably ends up including the items they loss lead on. And £3.84 shopping basket is no kind of a basis for statistics on the cost of food. Even the low income part of the population, some rare exceptions aside, are spending a lot more than that on a typical weekly supermarket shop, and buying much more diverse items. So, as stats, it is utter rubbish and unrepresentative even of lower income people's shopping.

Nevertheless it has succeeded in bringing to widespread public attention what has been known in specialist circles for decades, that the price index can be badly unrepresentative of lower income people's shopping. Such an index would be more appropriate for indexing things like benefits. It always saddened me that during the Blair/Brown government, they didn't do very much to address the many features of the system that were loaded against the lower income and socially excluded.

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Re: The cost of living

Post by Bird on a Fire » Thu Jan 27, 2022 10:56 am

This will help - more benefit sanctions for the unemployed https://www.theguardian.com/society/202 ... -crackdown
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Re: The cost of living

Post by tom p » Thu Jan 27, 2022 1:42 pm

IvanV wrote:
Wed Jan 26, 2022 8:36 pm
Supermarkets are well known to carry out a practice called Loss leading, deliberately selling certain items below cost to attract the customers in. These prices do not reflect the true costs of items being sold. If a supermarket should decide to cease loss leading with a certain item, it may result in a large price increase for that item, in that supermarket. But who can really complain that they have now decided to stop making a deliberate loss on it?

It looks like JM has created her shopping basket out of a few super-cheap items, which inevitably ends up including the items they loss lead on. And £3.84 shopping basket is no kind of a basis for statistics on the cost of food. Even the low income part of the population, some rare exceptions aside, are spending a lot more than that on a typical weekly supermarket shop, and buying much more diverse items. So, as stats, it is utter rubbish and unrepresentative even of lower income people's shopping.

Nevertheless it has succeeded in bringing to widespread public attention what has been known in specialist circles for decades, that the price index can be badly unrepresentative of lower income people's shopping. Such an index would be more appropriate for indexing things like benefits. It always saddened me that during the Blair/Brown government, they didn't do very much to address the many features of the system that were loaded against the lower income and socially excluded.
You don't always need to give us the most patronising* version possible, Ivan. Everyone knows what loss-leading is.

Loss-leading isn't always on staples to attract poor people in. If I was a boss at Sainsbury's, I'd loss lead on a nice bottle of wince to attract middle-class people with more disposable income in. Which is what they do - there's always an offer on a nice bottle of red that would maybe retail at £15, but is now £9.99. I know that you would turn your nose up at such muck, but many of us are very happy with it, feel we've got a bargain, bag a couple and then spend our illusory savings on something else frivolous. Jack Monroe & her readers won't be doing that if they save tuppence on a bag of penne.


*"patronising" means talking down to people, suggesting that they don't understand the terms that you are using. It's especially frustrating when they are in common** parlance.
**Common means 'everyday' or 'usual', rather than lower class, in this case.

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Re: The cost of living

Post by IvanV » Thu Jan 27, 2022 3:25 pm

tom p wrote:
Thu Jan 27, 2022 1:42 pm
You don't always need to give us the most patronising* version possible, Ivan. Everyone knows what loss-leading is.
Apparently the journalist preparing the report didn't think about it. I think that was what tempted me to patron-splain it. I'm sorry if you took it personally.
tom p wrote:
Thu Jan 27, 2022 1:42 pm
Loss-leading isn't always on staples to attract poor people in.
Absolutely. The price girations of Yeo Valley yogurt and Lurpak butter are well known to me. But that's not relevant to the point in question.

The point is that a lot of supermarket loss leading goes on with cheap everyday basic items like milk, basic dry pasta, tins of tomato, etc. And that is part of why what JM did was not good statistics.

The £15 bottle of wine reduced to £10. Yes, that can be a promotion.* But it can also be the trick of initially putting a very high price on something, so they can make a song and dance about reducing it to a price it is still too expensive at.

*I was recently pleased to buy some bottles reduced from £8 to £6.50 - they were an outrageous bargain at £8, but apparently not many people noticed. You are correct that I rarely buy sub-£10 bottles.

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Re: The cost of living

Post by lpm » Thu Jan 27, 2022 4:07 pm

I don't believe there's any loss leading or promotions on the relevant items. Aldi and Lidl prices hold the other supermarkets down to their anchors. Pasta is the only anomaly. It was interesting to see the consistency of prices from last year to now, plus between shops.

No change for baked beans, tinned spaghetti and rice.

Bread 20% cheaper.

Pasta 31% cheaper at Aldi and Tesco, up 141% at Sainsburys.

Curry sauce and peanut butter up approx 50%.

Apples and mushrooms up approx 33% (fruit and veg obviously have much higher price variability across the year).

I've being reading around and I'm pretty sure an index for the poorest decile, or even poorest 1%, is going to show lower inflation than the general CPI index. Food & drink is in the 1% region, compared to general inflation of around 5%. It's very clear that the most inflationary goods & services in the CPI basket are those consumed by the richer half. The goods with price falls are lower decile leaning.

Hence if benefits rose by CPI's 5% (big if I know) then that could be a real prices increase in benefits.

This campaign is worryingly vulnerable because it's leading with the rice f.ck up and the claim that's risen by 344%. You'd think anyone would see 344% and think wtf's happened with rice, that must be making headlines around the world. When it's just a simple mistake and it's actually 0%. It's frustrating that Monroe is tweeting stuff like:
I mean of all the things, the Prime Minister claiming that he’s cutting the cost of living while the price of basic food products shoot up by THREE HUNDRED AND FORTY FOUR PERCENT is the one I’m properly angry enough to riot over.
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Re: The cost of living

Post by Pishwish » Thu Jan 27, 2022 4:56 pm

Good work, lpm (assuming Sainsbury's hasn't done damage control by reverting its prices in the last week).
I think a lot of mushrooms sold in the UK come from Ireland and farmers had complained that brexit had hit them hard due to unfavourable exchange rates. (I'm sure covid didnt help either, as picking tends to be a low wage job often done by foreign labour. Maybe brexitycovid labour shortages are also the reason for high domestically produced veg prices in the uk).

Eta prices

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Re: The cost of living

Post by dyqik » Thu Jan 27, 2022 5:47 pm

lpm wrote:
Thu Jan 27, 2022 4:07 pm
I don't believe there's any loss leading or promotions on the relevant items. Aldi and Lidl prices hold the other supermarkets down to their anchors. Pasta is the only anomaly. It was interesting to see the consistency of prices from last year to now, plus between shops.
Loss leading would typically be on advertised items. That often includes milk and eggs (at least here), but not so much other staples.

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Re: The cost of living

Post by IvanV » Thu Jan 27, 2022 5:50 pm

lpm wrote:
Thu Jan 27, 2022 4:07 pm
I've being reading around and I'm pretty sure an index for the poorest decile, or even poorest 1%, is going to show lower inflation than the general CPI index.
What have you been reading? I've been reading, and so far I only find the opposite.

This recent IFS paper looks at the impact of recent price increases by income decile, and finds that the bottom decile is hurt worse than average. The high deciles also. The middle deciles do best, especially the 2nd decile. But interesting how little it varies, all within a 4.0% to 4.5% range.

In 2018, ONS did a long term study on inflation by income group. One comment is that the first and 10th deciles are a bit odd, so they concentrate on 2nd and 9th deciles. Figure 1 does seem to show that most of the time the 9th decile has experienced lower inflation than the 2nd decile, and often by quite a material amount.

A recent US research paper examines a low income inflation index for the US, and finds it would in general be higher.

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Re: The cost of living

Post by tom p » Thu Jan 27, 2022 6:06 pm

IvanV wrote:
Thu Jan 27, 2022 5:50 pm
lpm wrote:
Thu Jan 27, 2022 4:07 pm
I've being reading around and I'm pretty sure an index for the poorest decile, or even poorest 1%, is going to show lower inflation than the general CPI index.
What have you been reading? I've been reading, and so far I only find the opposite.

This recent IFS paper looks at the impact of recent price increases by income decile, and finds that the bottom decile is hurt worse than average. The high deciles also. The middle deciles do best, especially the 2nd decile. But interesting how little it varies, all within a 4.0% to 4.5% range.

In 2018, ONS did a long term study on inflation by income group. One comment is that the first and 10th deciles are a bit odd, so they concentrate on 2nd and 9th deciles. Figure 1 does seem to show that most of the time the 9th decile has experienced lower inflation than the 2nd decile, and often by quite a material amount.

A recent US research paper examines a low income inflation index for the US, and finds it would in general be higher.
You have to remember that lpm neither links to her claims or consistently tells the truth. She probably thinks she's being funny.

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Re: The cost of living

Post by lpm » Thu Jan 27, 2022 7:16 pm

IvanV wrote:
Thu Jan 27, 2022 5:50 pm
lpm wrote:
Thu Jan 27, 2022 4:07 pm
I've being reading around and I'm pretty sure an index for the poorest decile, or even poorest 1%, is going to show lower inflation than the general CPI index.
What have you been reading? I've been reading, and so far I only find the opposite.

This recent IFS paper looks at the impact of recent price increases by income decile, and finds that the bottom decile is hurt worse than average. The high deciles also. The middle deciles do best, especially the 2nd decile. But interesting how little it varies, all within a 4.0% to 4.5% range.

In 2018, ONS did a long term study on inflation by income group. One comment is that the first and 10th deciles are a bit odd, so they concentrate on 2nd and 9th deciles. Figure 1 does seem to show that most of the time the 9th decile has experienced lower inflation than the 2nd decile, and often by quite a material amount.

A recent US research paper examines a low income inflation index for the US, and finds it would in general be higher.
2018 is irrelevant because current inflation is caused by all sorts of weird pandemic effects. But I appreciate their logic in looking at 2nd and 9th deciles - the poorest are the hardest to figure out a stable basket.

The fact is that food & drink inflation is currently about 1.3%. Clothing is deflation, approx -0.3%. Cars and petrol are very high inflation, so a lot depends on whether a poor household has to run a car. Hotels and restaurants are very high inflation, but I'm assuming this is low spend for the lower deciles, plus is more discretionary.

Which leaves gas and electricity. Which are a large proportion of spending by the lowest decile. I'd say an individual's personal inflation rate is going to depend more on the insulation and efficiency of her home than on whether Sainsbury's or Aldi is her nearest supermarket.

With energy price rises coming in April this is where to campaign, ahead of relatively stable food prices.

Claiming food inflation of 124% is not the way to highlight the coming poverty. The ONS is all over this, constantly looking at whether their baskets and averages are valid estimates. 1.3% might well be wrong due to breaking the product links, but it's clearly well below general inflation. And we're not going to get any useful data from a handful of self selected people who keep supermarket receipts.
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Re: The cost of living

Post by Sciolus » Thu Jan 27, 2022 8:23 pm

lpm wrote:
Thu Jan 27, 2022 7:16 pm
Cars and petrol are very high inflation, so a lot depends on whether a poor household has to run a car.
If they don't have a car, they will almost certainly depend on public transport, which has been high inflation for a long time.

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Re: The cost of living

Post by IvanV » Thu Jan 27, 2022 10:51 pm

lpm wrote:
Thu Jan 27, 2022 7:16 pm
2018 is irrelevant because current inflation is caused by all sorts of weird pandemic effects. But I appreciate their logic in looking at 2nd and 9th deciles - the poorest are the hardest to figure out a stable basket.
It was a study over 15 years, from 2003-2018. So "2018 is irrelevant" is not much of a comment on it.

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Re: The cost of living

Post by IvanV » Thu Jan 27, 2022 11:10 pm

lpm wrote:
Thu Jan 27, 2022 7:16 pm
The fact is that food & drink inflation is currently about 1.3%. Clothing is deflation, approx -0.3%. Cars and petrol are very high inflation, so a lot depends on whether a poor household has to run a car. Hotels and restaurants are very high inflation, but I'm assuming this is low spend for the lower deciles, plus is more discretionary.

Which leaves gas and electricity. Which are a large proportion of spending by the lowest decile. I'd say an individual's personal inflation rate is going to depend more on the insulation and efficiency of her home than on whether Sainsbury's or Aldi is her nearest supermarket.

With energy price rises coming in April this is where to campaign, ahead of relatively stable food prices.

Claiming food inflation of 124% is not the way to highlight the coming poverty. The ONS is all over this, constantly looking at whether their baskets and averages are valid estimates. 1.3% might well be wrong due to breaking the product links, but it's clearly well below general inflation. And we're not going to get any useful data from a handful of self selected people who keep supermarket receipts.
And the ONS report did indeed explicitly demonstrate, with data over 15 years, not just some present point in time, that energy prices were the largest factor in whether lower income people were suffering higher or lower inflation than others at any given time.*

We agree that the JM report was rubbish. But there have been some proper studies which all tend to show that on the whole lower income groups tend to suffer higher inflation. The recent IFS study showed that just at the present moment the differences have not been very large, and somewhat mixed.

Ultimately we come down to the problem that the inflation suffered by a particular household can be different from their social group, because of their own particular situation. What shops they have access to. Their dietary habits. What transport needs they have. Are they in rented accommodation that is expensive to heat because the landlord has not invested in insulation, as the landlord is not the one paying the energy bills.

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Re: The cost of living

Post by Millennie Al » Fri Jan 28, 2022 1:05 am

lpm wrote:
Wed Jan 26, 2022 5:37 pm
Right, I've gone off and audited Monroe's price claims.

Which maybe the rest of you should have done before we started.

I've used Sainsburys online because I think that's the shop she uses.
I'll do the same for Tesco (all prices from tesco.com).
Pasta in my local supermarket (one of the Big Four), was 29p for 500g. Today it’s 70p. That’s a 141% price increase as it hits the poorest and most vulnerable households.
No. Down at 20p/500g - Hearty Food Co. Spaghetti Pasta
This time last year, the cheapest rice at the same supermarket was 45p for a kilogram bag. Today it’s £1 for 500g. That’s a 344% price increase as it hits the poorest and most vulnerable households.
No. Same at 45p/1Kg Grower Harvest Long Grain Rice
Baked beans: were 22p, now 32p. A 45% price increase year on year.
No. Same at 22p/420g Stockwell & Co Baked Beans In Tomato Sauce. (But note that some cans are 410g, so this might even be cheaper).
Canned spaghetti. Was 13p, now 35p. A price increase of 169%.
Yes. 35p/410g Tesco Spaghetti Rings
Bread. Was 45p, now 58p. A price increase of 29%.
No. Down to 36p/800g H W Nevill's White Bread
Curry sauce. Was 30p, now 89p. A price increase of 196%.
Partly. 45p/440g Hearty Food Co. Curry Sauce
A bag of small apples. Was 59p, now 89p (and the apples are even smaller!) A price increase of 51%.
Partly. 79p/Rosedene Farms Small Apple 6 Pack
Mushrooms were 59p for 400g. They’re now 57p for 250g. A price increase of 56%.
Yes. 110p/500g Tesco Sliced Mushrooms
Peanut butter. Was 62p, now £1.50. A price increase of 142%.
Partly. 89p/340g Stockwell & Co Crunchy Peanut Butter

So that's two claims are true, three are false but some increase has occurred, and four are false because the price is the same or lower. Even the ones which are true may not be reasonable. Apples are not the only fruit. If you're prepared to switch you can get Suntrail Farms Soft Citrus Pack 600G for 69p. It's not clear how that compares to th 59p/pack of apples, but it looks like better value to me. Note also that fruit are seasonal, so if you are going for the cheapest you need to follow the seasons.

So the whole thing looks unfounded. It also seems very questionable to get a hypothesis and do such minimal research into it before publishing an article in a nationally popular newspaper.

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Re: The cost of living

Post by Gfamily » Fri Jan 28, 2022 1:33 am

f.cks sake!
What's the minimum order for a tescasda/sainsborrisorisons.com order?
Serious question.
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Re: The cost of living

Post by Bird on a Fire » Fri Jan 28, 2022 1:41 am

Yes. People are collecting a lot of data to answer the wrong question.

The right question relates to the cost of products available in people's local shops.
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Re: The cost of living

Post by monkey » Fri Jan 28, 2022 3:03 am

Gfamily wrote:
Fri Jan 28, 2022 1:33 am
f.cks sake!
What's the minimum order for a tescasda/sainsborrisorisons.com order?
Serious question.
I looked up Sainsbury's. They say
Delivery Charges

Orders under £40 will be charged £7 for standard delivery
Orders over £40 will vary between £1- £4.50.
Minimum order value £25​
Couldn't be bothered looking at others.

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Re: The cost of living

Post by Woodchopper » Fri Jan 28, 2022 5:59 am

Bird on a Fire wrote:
Fri Jan 28, 2022 1:41 am
Yes. People are collecting a lot of data to answer the wrong question.

The right question relates to the cost of products available in people's local shops.
Yes, indeed. What’s needed is for people to regularly visit a representative sample of shops and record the prices of a set of goods that are key purchases by consumers.

Which is the methodology used by the Office of National Statistics. You can read the December data here: https://www.ons.gov.uk/economy/inflatio ... cember2021

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Re: The cost of living

Post by lpm » Fri Jan 28, 2022 8:13 am

Exactly. This needs to be done properly by the ONS. The entire approach is wrong. The proposed index and it's methodology is absurd.
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Re: The cost of living

Post by lpm » Fri Jan 28, 2022 8:16 am

Bird on a Fire wrote:
Fri Jan 28, 2022 1:41 am
Yes. People are collecting a lot of data to answer the wrong question.

The right question relates to the cost of products available in people's local shops.
These products are available at these prices in stores. They are not online only. But individual stores might be out of stock or not carry the line.
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Re: The cost of living

Post by Bird on a Fire » Fri Jan 28, 2022 10:30 am

Woodchopper wrote:
Fri Jan 28, 2022 5:59 am
Bird on a Fire wrote:
Fri Jan 28, 2022 1:41 am
Yes. People are collecting a lot of data to answer the wrong question.

The right question relates to the cost of products available in people's local shops.
Yes, indeed. What’s needed is for people to regularly visit a representative sample of shops and record the prices of a set of goods that are key purchases by consumers.

Which is the methodology used by the Office of National Statistics. You can read the December data here: https://www.ons.gov.uk/economy/inflatio ... cember2021
Yes, but their index includes stuff like hotels, furniture, eating out and fancy food and wine.

Monroe is proposing a related index, but using a set of goods that are key purchases by very poor consumers.
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