Unlike any other science, economics is prone to give away the plot before the curtain rises. Behind the scenes, everyone is committed to turn out a happy ending, almost regardless. There is ambivalence towards change, even though the job description is built around identifying and predicting the future without fear or favour.
In the summer of 1914, the Ministry of Labour started collecting the food data for the Cost Of Living Index Number. Straight out of the gate, there is no way in which vegetables other than potatoes can be included in a year-round constant economic indicator. Potatoes can be stored all round the year and can be shipped from growers all over the world, whatever the season. We have already listed the foodstuffs that were monitored and index-weighted against other products or sectors. Having seen what the Ministry of Labour brought to the table, it is time to look at how the price points for these goods were settled. The researchers searched out prices displayed by over 5,000 retailers, even though there was a lot of repetition in the mix. In some areas, shopkeepers voluntarily maintained the same prices for known value items {KVI), a practice that would be unthinkable in the twenty-first century.
In the initial layout stages, some prices would be queried: if the point is to gather live data, it should be taken as found, warts and all. Modern food manufacturers refer to a group of products that are “liquid with identifiable lumps” and I would apply the “identifiable lumps” analogy to raw price data. The lumps are the very point of the work in hand, giving both insight and substance. The process moves up a gear, averaging the product families and applying percentage shifts to some big and bulky calculations. Statistics at this level is not for the faint-hearted. The table below, taken from November 1, is an example of the genre.
The consumer panel was first used by the Board of Trade in 1904, when 1,944 urban working households were recruited. The data was calculated on the basis of weight, making comparisons between years more reliable, the civil servants argued. It is a moot point that a shop price in pounds, shillings and pence should resolve into a comparable pounds and ounces value at the table. The world in which we live is moving away from meaningful comparisons with previous eras, which need to be taken with a pinch of salt.
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