Tuesday, 12 April 2011

Bad statistics

So, I came across this graph today:


Now, can you see the obvious flaw in this graph? I can. The graph shows Entitlement spending & Interest payments increasing at a rate produced by essentially drawing a line following the current direction of entitlement spending. However, the Revenue line, instead of being extrapolated from it's most recent direction,  quickly levels out and flat lines in the prediction.

Now, call me stupid, but looking at the underlying trend, I would say it's far more likely that entitlement spending would probably grow at a relatively slow rate, just as revenue would probably remain steady.

Of course, that's not even mentioning the way that entitlement spending (the American name for welfare) and interest payments (presumably on the national debt) are lumped together. Of course interest payments are going to increase (assuming they don't start reducing the deficit), but why should that figure be combined with welfare spending? You might as well link it with military spending, or the federal government's budget for pens.

The graph is a fairly blatant example of how people use dodgy statistics, selective data and ridiculous extrapolation to reinforce whatever political point they are trying to make. In this case I'm fairly sure that the argument being made is that welfare spending should be slashed.

So, dear reader, be very careful when people use statistics or graphics to reinforce their points. I remember that at school we once compared ownership of microwaves with the likelihood of being burgled. There was a strong correlation but that certainly doesn't mean that microwaves attract burglars.

Essentially, whenever someone shows you a graph, ask them what their assumptions are and make sure they justify them. If they can't then they're probably trying to hoodwink you.

1 comment:

  1. :) amusing. My dad used to say: lies, damn lies and statistics.

    ReplyDelete

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