Page:Graphic methods for presenting facts (1914).djvu/125

 *sibly obtain by two months of reading the reports of transportation companies and the pages of railway journals, and of asking questions from railroad executives.

A heavy line in Fig. 95 shows the relative average prices of fifteen articles of food used in workmen's families. Since the fifteen articles of food are not consumed in equal quantities, or in equal value, it was necessary to take into account the actual quantity or value used of each kind of food. This was done by the method usually designated by the name "weighted averages". It is obviously of less importance to the workingman if the price of salt should increase 500 per cent than if the price of bread or meat should increase 50 per cent. When the fifteen articles of food are considered by simple averages, all foods are considered as though used in equal quantities and a very great increase in the value of some one food would seriously affect the simple average even though that food is consumed in only small quantity. By weighted averages the actual price of any food is multiplied by the budget percentage figure showing the percentage of that food used. The products resulting from the multiplication are added for each year, and the totals or averages are compared on a percentage basis to give a corrected comparison by weighted averages of food prices in different years. The weighted averages represent more accurately than simple averages the increases in food prices as they really affect the pocketbook of the workingman. It will be seen at the right of Fig. 95 that the heavy line for simple averages is considerably higher than the dotted line representing the weighted averages. This shows the amount of error which would have resulted in this particular study if only simple averages had been used for comparison instead of weighted averages. Weighted averages are of very great importance in most studies relating to the cost of living, and they could be used in other work much more widely than at present if their importance and utility were more generally understood. It is unfortunate that in Fig. 95 the term "relative prices" is used in the lower portion of the chart as the key for the dotted line. The simple averages show relative prices also and the term "relative prices" means practically nothing. The dotted line could more properly be referred to by the term "weighted averages" as used in the title at the top of the chart.

Fig. 96 is an example of a type of chart which can be of great assistance to the chief executive of any corporation having a business