'When would you use the geometric mean?' blog discussion.

John_Pierpoint

Lies, damned lies and statistics ?

Gas has doubled in cost but my condensing boiler get twice as much heat out of it as the old cast iron one did.

Have I suffered inflation?

JimmyTheWig

John_Pierpoint wrote: »

Lies, damned lies and statistics ?

Gas has doubled in cost but my condensing boiler get twice as much heat out of it as the old cast iron one did.

Have I suffered inflation?

Depends on how much your new boiler cost compared to your old one. Maybe.

David42

zar wrote: »

... If you are interested in the differences and why they exist then I think the ONS document on arithmetic vs geometric means in CPI/RPI is a "good read"* - see around page 83 in:-

http://www.statistics.gov.uk/downloads/theme_economy/CPI_Technical_manual-2010.pdf

...

Very interesting. For those who don't want to read 137 pages, the most intersting conclusion is that since 1997 "the CPI annual rate would typically have been about 0.5 percentage points higher if the elementary aggregates had been calculated using arithmetic means as in the RPI". (section 9.4.1 of the article)