Another week, another (spurious) Correlation!
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For previous episodes, we’ve consulted the book “Spurious Correlations” to start the topic and build from it, but this week we’re going off the rails to find our own correlations! For this episode we noticed that the population of Austin TX and the inflation rate of the US Dollar has a 98% correlation from 1994 to 2016.
So this seems odd and interesting as both have had a decently steady rise for the last 23 years but then again there are a lot of other things that have a steady rise for a long time. To keep the relationships to population of places in the US we looked at the correlation to all 945 Metropolitan Statistical Areas in the US and the US inflation rate. We found that from 2010 to 2017, 343 cities populations all have over a 90% correlation to the US inflation rate and 222 cities have a negative 90% correlation with inflation. Basically, a lot more cities in the US are growing at a steady rate which match inflation but there are a good amount that have a steadily decreasing population which is negatively related to inflation.
The MSA level might be too granular so then we evaluated the correlation between inflation and the 50 states. 46 out of the 50 states have a correlation of over 70% with inflation with most (42 states) having an over 90% correlation. The two most oddball states are Vermont and West Virginia that have a negative 76% and negative 83% correlation with inflation. Interpreting this relationship would be that as people are moving out of Vermont and West Virginia and the dollar and cost of goods in the US is going up at the same rate. So if we could just keep people in those states, we all might be able to actually keep things on the dollar menu everywhere!
