Tuesday, November 27, 2012

Making sense of statistics

Morton Jerven has a fascinating post up at the Guardian, "Lies, damn lies and GDP", in which he discusses the striking unreliability of GDP figures for African countries. Best line:
The knowledge that currently there are 40 "Malawis" unaccounted for in the Nigerian economy should raise a few eyebrows.
The low quality of development statistics is well known to those in the field. Jerven's account reminded me of an apocryphal story about an aid official tasked with analyzing trends in economic growth in a particular aid recipient. After much work, he finally found a powerful pattern, noting that economic growth was almost exactly 1.25 times population growth. Proud of this insight, he traveled to the recipient country's economic ministry in order to share his new-found knowledge. As he was waiting at the desk of the official he had come to brief, however, he noticed a faded post-it note taped to the official's desk: "when unable to get growth data for the annual report, just use population growth times 1.25".

Jerven (whose book on the quality of these statistics, Poor Numbers, has just been published by Cornell University Press) correctly points out that
governments, international organisations and independent analysts need these development statistics to track and monitor efforts at improving living conditions on the African continent.
However, the problem is less serious for at least one particular use of these statistics. As I argue in my book, if we wish to study how a country's GDP factors into decision-making on the part of aid donors, international financial institutions, etc., what matters is not some "true" GDP, but rather what these international actors believe the GDP to be. For this purpose, then, the flawed statistics these actors had access to at the time they made their decisions are, in fact, preferable to retroactively "corrected" GDP estimates, regardless of how much better those new estimates reflect "true" GDP.

Monday, November 19, 2012

Let the pandering for 2016 begin...

Obama has only just been re-elected, and Florida senator Marco Rubio has already started pandering to the "my ignorance is just as good as your knowledge" crowd. Here he is in an interview in the Dec. 2012 issue of GQ:

GQ: How old do you think the Earth is?
Marco Rubio: I'm not a scientist, man. I can tell you what recorded history says, I can tell you what the Bible says, but I think that's a dispute amongst theologians and I think it has nothing to do with the gross domestic product or economic growth of the United States. I think the age of the universe has zero to do with how our economy is going to grow. I'm not a scientist. I don't think I'm qualified to answer a question like that. At the end of the day, I think there are multiple theories out there on how the universe was created and I think this is a country where people should have the opportunity to teach them all. I think parents should be able to teach their kids what their faith says, what science says. Whether the Earth was created in 7 days, or 7 actual eras, I'm not sure we'll ever be able to answer that. It's one of the great mysteries.

Of course, the reverend John Lightfoot already solved this mystery in a sermon in the early 1800s, determining that the earth was created in 3960 BC, or, to be even more precise: "That the world was made at equinox, all grant — but differ at which, whether about the eleventh of March, or twelfth of September; to me in September, without all doubt." (from Whole Works, 1822, vol. 7, p. 322).

Since Rubio thinks there are multiple theories (after all, bishop Ussher's more famous calculation has creation in 4004 BC), he is not, apparently, interested in any of the scientific knowledge accumulated in the past two centuries. Ignorance for president in 20165. Yeah!!