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Lies, Damned Lies and Statistics


When the city of New York recently threw a ticker-tape parade for the world champion Yankees, the mayor's office issued a release crowing that 3.5 million people had lined the mile-long route.

Even granting that the slimmest of folks showed up, they would still have had to line up 1,000 deep, an impossibility on Wilshire Boulevard let alone the cramped streets of lower Manhattan. Still, the 3.5 million statistic made front-page headlines and was repeated until it took on the aura of fact, just the way dubious Rose Parade crowd estimates have year in and year out.

While no one may have been harmed by this particular mathematical mismanagement, it is yet another case that demonstrates how we have become a statistically challenged society.

Statistics bludgeon us. They are out there everywhere, most often unencumbered by interpretation. Should I care about the Dow Jones 30, the S & P 500 or the Russell 2,000? Does anyone really understand the quarterback rating system, hockey plus-minus or earned run average? Why does body temperature go up with the consumer price index and down with the wind-chill index?

The ubiquity of statistics is often laid at the feet of computers, but the real problem is not the preponderance of stats, but that they float in the data murk without understanding or clear interpretation.

"People are being overwhelmed by quantitative information," said Robert Stine, a professor of statistics at the University of Pennsylvania's Wharton School. "They don't always get to hear the origin of the information and they don't listen for good interpretations."

Said Prof. Donald Ylvisaker, consultant to the UCLA Statistics Counseling Center, "The real problem is this: We have to shift from an age of information to one of intelligence. Anyone can put data out there. The problem is really to filter it out and interpret what it all means."

But it can be a real mess when the stats aren't up to snuff. "The list of shortcomings in U.S. economic data is depressingly long," Alan Greenspan, the chairman of the Federal Reserve Board, testified recently before Congress.

In fact, a study by Michael Waldman of Cornell University and Seonghwan Oh of Seoul National University showed that a series of pessimistic economic data compiled by the government in the first half of 1989 was significant in persuading businesses and consumers to cut their spending. Later on, the statistics were revised upward--more than 10% of government statistics reported are later changed, Waldman said--but by that time, the country had lost an estimated $10 billion in production.

Another common complaint among economists is that the consumer price index, the statistic that newscasters are talking about when they tell you about inflation, is just plain wrong. The general feeling among these economists is that because the index doesn't try to quantify efficiencies in production and increased quality of products, it continually overstates inflation by about 1%.

This all wouldn't matter if the index were just another number, but many folks look upon it as their favorite number. More than three-quarters of all corporations use the index to help figure out employee raises. The index is the major factor in figuring out Social Security payout rates. Thus, an incorrect index is self-fulfilling. Revisions may be coming soon from a federal panel appointed by the Senate.

Stine once worked on a project to figure out how much gasoline was used in the United States. He discovered that there were four sources of statistics, all seemingly accurate, that differed by 15% to 20%. "There were rational explanations for this: Some were by consumption, some were by production. But it gave you a way to interpret them," he said. "Unfortunately, the government now has only one number. There's no conflict now, but can you really believe the new number?"

Statistical sleight of hand figured in the recent election campaigns, when Democrats repeatedly accused Republicans of proposing to cut Medicare. Republicans complained bitterly that they merely proposed to cut the size of the increases the Democrats had proposed. Everybody understood the distinction, right?

But what about the weather? Surely, no stat could confuse that.

"The wind-chill index has confused people as to what the real temperature is," said Fred Godomski, the head of the Pennsylvania State University TV Meterology program. "You have two temperatures floating around in the winter. Actually, it's an attempt to impart more drama to the weather.

"And the UV Index, ugh!" Godomski said. "Dermatologists say any type of sun is bad for your skin. It's just a proliferation of babble, just data for no reason because we can report it."

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