Monday, April 12, 2004

Kerry's Origami Economics - Home Ownership

Home ownership is expressed as a percentage and is "computed by dividing the number
of households that are [occupied by] owners by the total number of [occupied] households" (Census Bureau). The source data from 1965 to the present is here.

Kerry seeks to view this statistic as a rate of change from one period over another. This introduces the first problem. Quite by definition, as a percentage approaches 1.00, the rate of increase decreases even though absolute increases continue to be seen. You see, by analogy, if everyone is poor and makes $1.00 a year and they thereafter earn $3.00 a year, then Kerry would think that is good - a 200% increase. But if everyone is rich and makes $100,000 a year, and thereafter makes $110,000 a year, Kerry would think that is bad because they only made 10% more, as opposed to the 300% increase of the other group. Personally, I would rather be in the 10% increase group.

Viewing the source data, home ownership for Q4/2003 is at 68.6% - the highest rate in history. Higher, ergo, than at any time in the Clinton years. In fact, every quarter under W has been higher than any quarter in history. And since we are on the topic, Clinton's time saw rates as low as was seen in 1967.

I don't need to invert the standard deviation as Kerry wants me to in order to understand that more people own homes than ever.

Who does this guy's figuring?

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