Tyranny of numbers

The anniversary of the Islamic Revolution 40 years ago this month coincided with the deepest economic crisis Iran has experienced since the war with Iraq in the 1980s.  As with top Trump administration officials, who wished the crisis on ordinary Iranians in the hope of enlisting their help in regime change, excitement among the Iranian opposition abroad is palpable.   The occasion has also stimulated discussion of success and failure of the revolution concerning a wide range of issues and metrics.  Much of the discussion involved comparison of living standards in Iran between now and in the 1970s (read my own comparison in Project Syndicate here.)

As before-after comparisons go, how much gold you can buy now and then offers a more edifying standard than the price of cucumbers, but it is more misleading.  Prices of assets are notoriously volatile and therefore should not be used for real income comparisons. You can find several Iranian sites like this one (link in Persian) with such comparisons, but I will discuss the most visible one, the news analyses of the BBC Persian service.  BBC Persian offers many informative programs and generally upholds the high standards of its parent news service, BBC World News. But in this particular case it has erred badly.  A report which aired a couple weeks ago asked how much gold a teacher could buy now and in 1974.  This year is perhaps not the best choice for a before-after comparison as Iran is in the middle of an economic shock engineered by the US and not the result of the normal operations of the Iranian economy (which is quite poor on its own). Nor is 1974 good as a start year because Iran received nearly four times as much oil revenues per person — a gift from the rest of the world –in 1975 as it does now.  Taking 1972 and 2017 would have offered a more informative comparison, but this is a secondary point.