SRQM

It might not feel like it to those stuck on a delayed train or struggling to get a mobile phone signal but Britain has been ranked as the second most advanced country in the world in a new measure designed to rival GDP.

Percentages don’t lie—but they can exaggerate. One way to make growth look explosive is to use percentage change to describe some change relative to a very low starting point.

The head of Greece’s statistics agency, Andreas Georgiou, is to face a criminal inquiry. An ex-employee of the Hellenic Statistical Authority (ELSTAT), Zoe Georganta, has accused him of colluding with the European Union’s statistical arm, Eurostat, to inflate Greece’s deficit figure for 2009, thereby justifying Greece’s EU-IMF bailout, signed in May 2010, and its drastic austerity measures. Georgiou vehemently denies the charges.

In order to get access to public statistics, first the microdata must be collected, then it must be compiled into useful indicators, and then these indicators must be published. The amount of coal one factory burnt during one year is microdata. The emission of carbon dioxide per year per person in one country is an indicator. Microdata and indicators are very very different numbers. CO2 emissions data is often compiled with great delays. The collection is based on already existing microdata from several sources, which civil servants compile and convert into carbon dioxide emissions.

Let’s compare this with calculating GDP per capita, which also requires an amazing amount of collection of microdata, which has to be compiled and converted and so on. That is done every quarter for each country. And it is swiftly published. It guides economic policy. It is like a speedometer. You know when you drive your car you have to check your speed all the time. The speed is shown on the dashboard.

Carbon dioxide is not on the dashboard at all. It’s like something you get with several years delay, when you are back from the trip. It seems that governments don’t want to get it swiftly. And when they publish it finally, they publish it as total emissions per country. They don’t want to show emission per person, because then the rich countries stand out as worse polluters than China and India. So it is not just an issue about open data. We must push for change in the whole way in which emissions data is handled and compiled.

The takeaway from that is that not just the Malawi murder but all the UNODC data supposedly derived from public health sources is questionable. I’m not trying to claim that these statistics were necessarily faked intentionally. I can imagine a number of ways they could have been screwed up by mistake.

Not everyone agrees as to what “development” means, but for most economists, development means increased standards of living, which are best measured via economic statistics such as gross domestic product (GDP) per capita, which may or may not reflect growth in the manufacturing and services sector of the economy.

Assigning actual numbers. If an index is an aggregation of separate sets of data, one has to decide on how to put them all together. Weighting is often used. In the new Global Terrorism Index, for example, the components of the index are numbers of terrorist attacks, numbers of fatalities, number of injuries, and property damage. Each of these components is given a weight (fatalities are weighted more heavily than attacks, 3 to 1). These choices can be fairly arbitrary. A naïve critique would be to drop the whole assigning numbers endeavor. A more nuanced critique suggests adjusting these weights and examining how it influences the rank ordering of the cases and choosing the one that best fits theory/expectations. In other words, if the Failed States Index ranks Brazil as more likely to fail than Greece, then we might want to consider adjusting some of these aggregation rules (which is fact the case: Greece is 138 vs. Brazil at 123. Syria and North Korea also defy face validity tests with North Korea at 22 while Syria is at 23).

One of the longest running features of the society’s publication, The Indexer, is its reviews of indices which are snippets culled from book reviews that pertain to the book’s index… They also regularly publish articles that meditate on what it means to be an index, defend indexing, and a look at the history of indexing societies.