Lily estimated 5% inflation rate based on the increase of his empire's production per turn. This value is not necessarily correct value, it is an estimate. The true value doesn't matter as much as understanding what this all means (on standard speed):
1) Chopping is more powerful than building a mill (unless you have +3 mills like Canada's UA)
2) the value you get from mills / mines decreases over time since the game is nearing it's end and the number of turns available to get yields per turn is less. Therefore chopping makes even more sense later in the game.
@Sostratus' comment above links to a previous analysis that demonstrates this clearly.
So how should this inform/revise one's gameplay?
1) You don't have to change anything with how you play if you're already doing fine and not interested in being more efficient/faster. Fun and enjoyment trump efficiency, it's a game.
2) if one does want to be faster, plan carefully ahead what woods you wish to keep for say, district adjacency bonuses or for later wonders in the game, (or indeed the climate, trees help prevent drought and deforestation amplifies co2 effects). Everything else is chopping wood. Chop as soon as you can to boost your production and advance more quickly. Having something
now is better than having it later.
3) for tiles that won't be chopped, the sooner you build mills on them the more value you will get out of them. In the late game if no chopping wood is left and you really wish to rush something then it could make sense to chop these tiles too even if it does need 2 builder charges to remove the mill and chop. But try to avoid this situation by planning ahead.
I guess the final question I have is, do the same rules apply for both woods and rainforest? You only get half the production when chopping rain forests, although the ability to build mills on them (Mercantilism) comes relatively late, when mills have even less time left to be useful.