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Dec 15

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The 12 Days Of Christmas – A Lesson In How a Complex Appraisal Can Go Astray

For the first time ever, the cost of the gifts featured in the Christmas carol, “Twelve Days of Christmas,” totals more than $100,000. Financial services company, PNC Wealth Management, just released its 28th annual estimate of the “Christmas price index”, a whimsical economic indicator that tallies the prices of the following basket of Christmas gifts from the well known carol.

Here is a summary of their calculation:

Gift
One Set of
Each Gift
Total Cost of Repeated Gift Sets
A partridge in a pear tree
$184.99
$2,219.88
Two turtledoves
125.00
1,375.00
Three French hens
150.00
1,500.00
Four calling birds
519.96
4,679.64
Five golden rings
645.00
5,160.00
Six geese-a-laying
162.00
1,134.00
Seven swans-a-swimming
6,300.00
37,800.00
Eight maids-a-milking
58.00
290.00
Nine ladies dancing
6,294.03
25,176.12
Ten lords-a-leaping
4,766.70
14,300.10
Eleven pipers piping
2,427.60
4,855.20
Twelve drummers drumming
2,629.90
2,629.90
Total
$24,263.18
$101,119.84

In this article, we highlight a number of key factors (some might say errors) made in the calculation. While the Christmas price index is clearly not intended as a serious economic indicator, the article illustrates some of the most common problems with valuations generally.

About the author

Benjamin Bohr

Benjamin is a manager at Fulcrum Financial Inquiry. He specializes in statistics and data analysis for use in high-stakes litigation, business valuations, and other financial matters.

Permanent link to this article: http://betweenthenumbers.net/2011/12/the-12-days-of-christmas-a-lesson-in-how-a-complex-appraisal-can-go-astray/

1 comment

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