Misinterpreting Data

The March 5, 2010 New York Times headline read, “jobless rate holds steady, raising hopes of recovery”. Apparently it doesn’t take much to raise hope, at least among those doing the reporting.  Why is two consecutive points with the same value (i.e. 9.7% in both January and February) a reason for hope?  Would two consecutively made baskets in basketball constitute a scoring run? How about two winning hands at the blackjack table? Clearly not!  Two points does not constitute a trend.  Thus, the call for hope of a recovery is misleading; the result of a lack of understanding of how to read variation.

This is not the first instance of a misreading of data.  In June 2009 the headline read, “Hints of hope in jobless data even as rate jumps to 9.4%”, and in August 2009 the message was “…the jobless rate unexpectedly fell to 9.4 percent, from 9.5 percent, the first decline since April 2008.Such commentary is not reflective of any understanding, it merely reflects reaction to a difference.  It is merely reporting the large or the small or the most recent—any uninformed person could do this!  Although it may sell papers it doesn’t really help anybody.

Unfortunately such misuse and misinterpretation of data is epidemic! Given the widespread use of variance budget reports, it happens in business organizations on at least a monthly basis (see https://forprogressnotgrowth.com/2010/01/01/by-the-numbers ).

Those using data should learn how to understand the variation in the data they are using, and stop telling stories.  Until there actually is a (meaningful) trend in the data, reflective of a predictable pattern or of a change in the system, people should limit their story telling to children at bedtime—at least this would serve some good.

Our world is one of systems within systems, where each responds to and produces variation.  Thus, given the pervasiveness of variation, the need to learn how to understand it is paramount.  Yet the lack of statistical thinking is epidemic.

We wouldn’t think it was okay to place someone in a responsible position that couldn’t read, yet we regularly place those ignorant of statistical thinking is such positions.  Why is an ability to understand systems and the associated variation produced not seen equally as essential to competence as an ability to understand the written word?

4 thoughts on “Misinterpreting Data

  1. To give them their due, though, I think they believe that the two consecutive points “near one another” enough to constitute a basis for saying that they represent the “same” number. Or perhaps that the real maximum was hit between the two measures so that one of them represents the series almost at its max, the other represents the series that has just hit its max and is slowly declining. Wouldn’t it be nice if this were true? I guess they are hoping, along with the rest of us, that unemployment has hit its apogee and is about to decline.

    Having given the devil his due, I agree with pretty much everything you have said!

  2. I couldn’t agree more. Was shocked in early working life when I found out that my director had absolutely no clue about numbers, up to the point that revenue reporting became a serious drag!

  3. Pingback: A Matter of Results « For Progress, Not Growth

  4. Pingback: Data Should Lead to Understanding « For Progress, Not Growth

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