Adjusting for inflation: A beginner’s guide

When Daniel Craig hit theaters in Quantum of Solace in 2008, the 22nd film in the James Bond spy series, his ability to dispatch bad guys (and charming good looks, no doubt) helped it earn $168.4 million. That was enough to rank Solace among the top 10 grossing films of 2008.

But how did Solace fare against the rest of the Bond canon, which stretches back to 1963’s Dr. No? The answer depends on whether you adjust for inflation.

We all know that the price of a loaf of bread isn’t what it used to be. The cost of consumer goods tends to rise each year, except during downturns or various calamities. So, taking inflation (or deflation) into account is the only way to  meaningfully compare dollar amounts over time.

There are plenty of apps just for this. The Bureau of Labor Statistics offers one basic calculator, and there’s another at this site. They’re fine for a quick check, but I’d rather do my own calculations. A web app might not have the latest data. And if you’re adjusting more than a couple of amounts, using a spreadsheet will save time. Here’s an exercise from Bond-land:


Percent change: Know the formula

Here’s a question I posed to some college students recently:

Let’s say you cover the Town of East Middleburgtown. The mayor announces that this year’s town budget comes in at $12.6 million. Last year’s budget was $11.4 million. What is the percent change? Better yet, what’s the formula for figuring it out?

If you don’t know the answer, or how to obtain it, you’re not alone. This kind of problem — which is in my son’s 7th grade math textbook — routinely stumps most journalists in most of the newsrooms across America.

I’ll avoid the temptation to moralize here. If you’re a journalist — if you have a pulse — you need to know this very basic operation. With it, you’ll have the power to analyze all kinds of data and even double-check the mayor’s math.

Here it is:

(the_new_number - the_original_number) / the_original_number

or, in the case of East Middletownburg:

(12.6-11.4) / 11.4

Remember (and you learned this in fifth grade) that operations in parentheses come first. That gives you this:

1.2 / 11.4 = .105 = 10.5%

So, the mayor’s new budget is a 10.5% increase over last year’s. Now you have something to write about!

Excel: Combine text and formulas in a cell

Whenever I analyze data in Excel, I format the spreadsheet to make it easier to read. A little attention to fonts, boxes and shading can help people understand the key data faster.

One way to give yourself some flexibility with formatting is to combine text and the results of a formula in a single cell. Just use the “&” operator to concatenate the text and the formula.

Consider this formula:

="Quantity: "&SUM(A1:A20)

Enter it into a cell, press enter and (assuming you have numeric values in cells A1 through A20) it will present this result in a single cell:

Quantity: 23

That kind of output’s pretty handy when you want to create a worksheet in your spreadsheet that aggregates data from other sheets while keeping the formatting simple.

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