Herald on Sunday story badly wrong

Susan Edmunds at the Herald on Sunday writes:

The cost of feeding your family a cooked weekend breakfast rose by more than three times the rate of inflation over the past five years — and the price increases aren’t likely to stop.

This makes it sound like breakfast food prices have been rising faster than other costs. Their calculation:

If you served tomatoes, mushrooms, bacon, toast, eggs, tinned spaghetti and cereal, with coffee, tea and orange juice this weekend, it would have cost you 6.9 per cent more than the same meal in 2008, and almost 3 per cent more than in 2012. Breakfast food prices have risen more quickly than other prices.

Over the past five years, the compound average annual rate of inflation was 2.1 per cent.

This is so wrong and deceptive, it is appalling.

The story is comparing the cumulative five year price increase of cooked breakfasts with the average annual inflation rate. That is not apples and apples. That is comparing the cost of five apples to one apple.

Yes the average annual inflation rate has been 2.1%. What that means is that prices overall have increased 10.8% from December 2008 to December 2013. The CPI for those quarters was 1072 and 1188 respectively.

So if the cost of breakfast has increased by 6.9% over five years, then the cost of breakfast has increased by around 60% of the overall inflation, not by three times as much. The average annualized increase in breakfast is 1.4% – again far less than 2.1%.

This story should be pulled from their website it is so wrong. I’m not sure a correction can fix it, as its central premise is flawed.

I also doubt some of the data in there. I presume they got more detailed data from Stats NZ than on Infoshare, but even what Infoshare has doesn’t support some of the assertions such as:

A loaf of bread is now 11 per cent more expensive than it was in 2008.

The bread sub-index was 1290 in Dec 2008 and 1374 in Dec 2013 (and down to 1359 in Feb 2014). This is a five year increase of 6.5%, not 11%.

But even if you accept their figures are correct, their assertion is fundamentally wrong. The cost of a cooked breakfast has not risen three times faster than inflation. It has risen slower than inflation.

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