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Statistics - it's not what you say, it's the way that you say it
IT is not often, during a lifetime, that one has an "eureka" moment when, in an instant, one's whole understanding of a subject is transformed, but when I opened my mailbox, the morning after my last column appeared, it happened to me.
The column had provoked more e-mails than any before and they all shared a single sentiment.
My correspondents all wanted to tell me they hoped my optimistic prognostications for 2009 were fulfilled or feared things would turn out much worse than I suggested. What I had written was: "At the end of the year, about 99.5% of people who have mortgages now will still be living in their homes and more than 95% of people who are in employment now will still be employed. Food and petrol will be a lot cheaper than they are now and inflation, at least for the time being, will have more or less disappeared."
Now I have to admit I am not a professional economist.
I am a mere scribbler, but though I do make mistakes, I prepare this column carefully and, before writing that paragraph, I had picked the three most pessimistic assumptions about the recession I could find in the heavyweight financial newspapers and magazines.
They were that, by the end of 2009, 75,000 homes would have been repossessed, three million people would be unemployed and inflation would have been replaced by deflation. I was really quite thorough and I do not believe there is any serious commentator suggesting things will be worse than that.
What I then did was to convert those raw numbers into a form of words that would be meaningful for the ordinary, intelligent reader and, hey presto!, people thought I was being much more optimistic than the news media they had been relying upon. I was not.
I was saying exactly the same thing – but in a more meaningful way.
There are always at least two ways to look at any number. Some people look at house prices today and say there has been a disastrous crash.
In a way, they are right. But you can look at the same numbers and say house prices today are the same as they were in 2004 – when we all believed they were astonishingly high. That is true as well.
Numbers are queer things and most of us understand them very little.
After the tsunami, most Englishmen felt proud of the self-sacrifice that led us to give 50m. for disaster relief, without noticing this "magnificent" contribution amounted to less than tuppence a week, per person, for that year of tragedy.
What I discovered, from my mail box, is that the old song is right. "It's not what you say, it's the way that you say it."
Perhaps what we most need, properly to understand our current economic circumstances, is a crash course in statistics.
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Sunday 05 February 2012
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