Tyranny of Numbers

The Economist has an article ‘Don’t lie to me Argentina‘ explaining why they are removing a figure from their indicators page:

Since 2007 Argentina’s government has published inflation figures that almost nobody believes. These show prices as having risen by between 5% and 11% a year. Independent economists, provincial statistical offices and surveys of inflation expectations have all put the rate at more than double the official number…

What seems to have started as a desire to avoid bad headlines in a country with a history of hyperinflation has led to the debasement of INDEC, once one of Latin America’s best statistical offices…

We see no prospect of a speedy return to credible numbers. From this week, we have decided to drop INDEC’s figures entirely.

Whilst we often talk about how statistics can always provide the answers people are looking for (hence the popular quote used as the title for this post), there is another angle to consider – are the underlying numbers telling the truth? It is a critical question when decisions are based on increasingly complex calculations that are then converted into summary data visualisations to assist decision-making. Was the original source data automatically scraped from systems or keyed in by people? Just how balanced is that scorecard..?

One of the current hot trends on the Internet is the emergence of ‘Big Data’ – being able to scrape massive quantities of information automatically generated, such as the search and surfing habits of everyone who ever logged into Facebook…  and then analysing for patterns. One of the potential attractions is eliminating human error – or influence (in terms of truthfulness) – over the underlying data sources. Doesn’t solve the challenge of influence through gaming of the system but that’s perhaps a post for another day.

If you are interested in the use and abuse of statistics, there’s an excellent short book that walks through historical examples of where statistics simply don’t work – The Tyranny of Numbers: Why counting won’t make us happy, by David Boyle – Click Here for an old book review I wrote.  And naturally, the book is listed on Amazon.

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