| Fun With Statistics |
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| Written by Tim Worstall | |
| Sunday, 09 September 2007 | |
Wat Tyler
does a sterling job, consistently cataloguing how our tax money is
burned on the bonfire stoked by the State apparatus. Here, he's looking
at the report just out on the productivity levels of the education
system. Yes, much more money is being spent and we obviously want to
know whether we're getting a better system for it. No is the obvious
answer, but have a look at the gymnastics necessary to cover this up.The ONS reckons that in the decade to 2006, overall spending increased in real terms by 25.3% (technical aside- regular BOM readers may wonder why that's less than the 60% quoted here: essentially it's because the ONS has deflated cash spending using a specific index of educational input prices, whereas we simply used the Treasury's GDP deflator: in other words, educational input prices- especially salaries- have risen much faster than the general price level... another Simple Shopper triumph).Now that might seem sensible, to use a different deflator: we've known for a long time that services will tend to become more expensive relative to manufactures, after all. However, the specific one used here is in fact driven entirely by the huge amounts of money being pumped into the educational system itself: as Milton Friedman pointed out, it's always a monetary matter and if you funnel it in to a certain sector then of course prices in that sector will rise. So by choosing that deflator they're actually covering up how badly the system has performed. Thus Wat's 60% is a better number to use: and output, even by the manipulation used, is only up 27% or so. Yes, we are spending more to get a worse education system.
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