atans1

“LIES, damn lies and statistics” and two local examples?

In Economy, Financial competency on 03/01/2012 at 7:36 am

Example 1?

So a reasonable interpretation of the minister’s comments below are that the inflation numbers as far as they affect HDB residents and non-car owners are a lot of rubbish because they are not affected. So why not construct an additional index that excludes these costs? The reason that this is not done could be that then other costs have to be included, such as a great weightage for public transport costs, and the cost of public housing. And this could outweigh the costs of rentals and car ownership? Better to talk in general terms, than create a rod to break the PAPpies back?

While Singapore’s economy is headed for a slowdown, Mr Lim noted that inflation is somewhat “persistent” due to factors such as global commodity prices, “particularly fuel and oil prices”. Other causes include the Government’s domestic policies on housing and car ownership, he added.

Reiterating that core inflation is “not unusually high”, Mr Lim said: “So if you are an owner of a HDB flat, the housing prices don’t affect you, and if you are not buying a car, the car prices also don’t affect you.”

Example 2?

 The chart is misleading because the tariff axis is over-extended … the fluctuations in the electricity tariffs are not clearly depicted and it gives a misperception that the electricity tariffs are not rising as much or as fast a rate as the fuel oil price.

To show a better comparison between the electricity tariff and the fuel oil price, I suggest the tariff axis to range up to 35, to just cover the maximum tariff (30.45 in Oct 08).  This will show the fluctuations of the electricity tariff vis-a-vis those of the fuel oil price better, graphically.

Must read: The ugly reality is that anyone in the know can present statistics so as to create the desired impression, rather than the truth. As usual, you need to know whether the source is credible and honest or not. Recommendations, double checking, second opinions and if necessary, hiring an expert, can all be helpful. One is never totally safe from this kind of falsification, but viable controls are possible. And the more you learn and are aware of the dangers, the safer you are. http://www.investopedia.com/articles/financial-theory/11/lie-with-financial-statistics.asp?partner=ntu11#axzz1fElSc8tZ

 Update at 7.20 pm on 3 January 2011: http://theonlinecitizen.com/2012/01/confused-over-u-save-rebates/ gives many more examples of possible misuse of stats.
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  1. There is indeed an index that measures inflation minus accommodation and private transport. It is the MAS core inflation index. Has been around for long time, and usually announced with the headline CPI. Just that it never caught attention from public.

  2. Who is he kidding, he is all bullshit. If you are owner of a HDB housing prices don’t affect you and if you are not buying a car the price also does not affect you, he said. That means to say that all those who requires a vehicle for their caused of duty, don’t buy, only he himself as Minister with all the perks, uses it, just because he is able to afford it due to his big fat pay can own a few cars and he will not be affected. Those who are staying in the same unit of HDB should live in the same unit for the rest of their life so as not to be affected no matter how the prices are being inflated. This is absolutely very selfish comment as he does not bother whatever the prices affecting the populations, implying that no money don’t buy he dosen’t care at all. Is this what he is trying to mean. So this is a Senior Minister’s thinking in Singapore, let the whole Nation judge is this fair comment from a Senior Minister. o

  3. So the guy is saying if you don’t (need to) buy a car now it doesn’t affect you, never mind if you need to buy it in 6 or 12 months’ time? Ditto housing? Same fried logic as the guy who says you can downgrade to cheaper rice – by extension, kut instead of bak kut, biscuits instead of fresh bread, whatever – so inflation doesn’t affect you. So what’s the fuss you vuvuzelas?

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