Monday, January 28, 2008

Income volatility: Is it all about the which data we use?

It sounds like it to me. Which data set is more "representative"? Which unit (household or individual) should this be studied?

Unfortunately, this debate also points to several things:
1. Failure of statistics to be able to settle the question of "representative"?
2. Failure of economic reasoning to be able to settle on the unit of analysis?

The CBO and Jacob Hacker seem to part ways and stick with the data that support their conclusions and at the same time pointing to each other's data as being the incorrect one. What a wonderful state of affairs.

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