Monday, December 24, 2012

Adam Davidson on statistics and narrative

If you haven't yet read Adam Davidson's article "God Save the British Economy" in yesterday's New York Times Magazine click on the link and read it. It's a very clear explanation of the British government's economic austerity policy and related criticism. From this blog's perspective it's also an explicit and important description of the use of statistics in forming narrative - the narrative that we use to make sense of the world.

Here's one example from the article:
Economics often appears to be an exercise in number-crunching, but it actually resembles storytelling more than mathematics. Before the members of the Monetary Policy Committee gather for their monthly meeting, they sit through a presentation from the Bank of England’s economic staff. The staff members take the most recent economic data — G.D.P. growth, the unemployment rate and more subtle details gathered from interviews with businesspeople throughout the country — and try to fashion it into a narrative. Does a sudden spike in new factory orders represent a fundamental shift, or is it just a preholiday blip? Do anecdotal reports of rising food prices herald a period of inflation, or is it the result of a cold snap? Which story feels truer?
I've often talked about the importance of thinking about the statistics we use, understanding the context and thinking about the cognitive choices we are making when we develop and interpret the statistics. In this story Davidson dissects a set of choices. Read it and think about it - and tell me what you think in the comments.

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