data, economics, lies and statistics, statistics

Lies, Damned Lies, and Statistics (35): Sample Sizes, Ctd.

cherry picking

cherry picking

(source)

This isn’t the first time I mention sample sizes as a common problem in statistics. Usually, the problem is one of survey design: insufficiently large sample sizes for respondents produce unreliable survey results.

However, the same error – or fraud, when the error is willful – can occur in data interpretation. Take a look at this graph by John Taylor:

investment GPD and unemployment John Taylor graph

(source)

The problem?

Taylor’s conclusion: The data on spending shares show that the most effective way to reduce unemployment is to raise investment as a share of GDP. But why begin the scatter plot in 1990? There’s no good reason. In fact, most folks typically download the entire history of available macro data. … The chart below goes back to 1948:

investment GPD and unemployment John Taylor graph 2

(source)

This is a form of cherry-picking data that allows you to “prove” a strong correlation where there’s actually none at all. In this way, you’ll find a correlation in almost all data sets, as long as you pick a sufficiently small sample of the set. In this example, you can only limit the selection to the last two decades if you have a good argument about why the economy is different now compared to some decades ago, and why there’s a correlation now when there wasn’t before. However, that argument – which would be interesting – seems to be lacking. And if it’s lacking,  there’s no excuse for cherry picking the last two decades.

Other examples of cherry-picking are here. More posts about lies and errors in statistics are here.

Standard

3 thoughts on “Lies, Damned Lies, and Statistics (35): Sample Sizes, Ctd.

  1. Pingback: Statistical Jokes (46): Sampling | P.a.p.-Blog, Human Rights Etc.

  2. Pingback: Statistical Jokes (49): Statistics Are Dangerous | P.a.p.-Blog // Human Rights Etc.

  3. Pingback: Lies, Damned Lies, and Statistics (47): Cherry Picking Time Series | P.a.p.-Blog // Human Rights Etc.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s