Winner of the New Statesman SPERI Prize in Political Economy 2016

Thursday, 28 April 2016

Politicians and statistics

We should all know never to take a statistic quoted by a politician on trust. But there is a huge difference between the ways in which politicians can (mis)use statistics.

Take, for example, when Labour before the 2015 election kept saying people were £1,600 worse off than they were 5 years earlier. As Tim Harford notes, there are a lot of issues in making any general claim based on earnings data. But as Geoff Tily points out, the £1,600 is hardly a wild exaggeration or gross distortion. It pointed to a key fact, which was an unprecedented decline in real earnings which no one seriously disputes. It would have been incredible if Labour had not kept talking about this.

Tim writes that it represents “a political use of statistics conducted with little interest in understanding or describing reality.” Of course it does not describe the complexity of reality, the differences between the median wage and the experience of the median worker, etc etc. Those complexities need to be set out and Tim does so brilliantly. But politicians in speeches will never do that, and it would be unrealistic to expect them to do so. There is also no evidence presented which justifies the claim that this statistic was used with little interest in understanding or describing reality.

Take another example from a recent post of mine. George Osborne had derived the cost of Brexit by taking the GDP loss and dividing it by the number of UK households. Fraser Nelson, and subsequently Anthony Reuben at the BBC, objected that this was dishonesty (Nelson) or confusion (Reuben) because only about two thirds of GDP was household income. Typical you might think for this Chancellor to misuse statistics to exaggerate. Yet as I explained in the post, what the Chancellor had done was standard practice by economists, because less government spending or investment are also in an important sense costs to households. In that case too, a politician was using a summary statistic in a reasonable way.

You might say that it is best for politicians to avoid quoting numbers, but numbers are often crucial. Take the claim, often made by opponents of immigration, that it reduces wages of low earning workers. There are studies that find that, but as this neat chart from the CER shows the magnitude is small relative to other influences on earnings. (See Jonathan Portes for more discussion on this.)


Magnitudes are often crucial. It is true, for example, that fiscal policy before the financial crisis was a little on the lax side. But the magnitudes involved could have been corrected by any new Chancellor in one budget with hardly anyone noticing. They are a world away from the magnitudes required to claim Labour were profligate before the crisis, and that austerity was required to clear up the mess that Labour had created. Given the importance (to the result) of that claim before the 2015 general election, it is odd indeed to focus instead on Labour’s claims about real earnings losses.  

The other examples Tim discusses in his article - Trump’s crime statistics and Jeremy Hunt’s figures for excess weekend deaths - are indeed totally or highly dubious, for reasons Tim makes very clear. Or an example that is close to my heart: the Prime Minister claiming that they had not cut spending on flood defences, which could be made to be true but hardly describes reality. These are all examples where the politician wants to mislead people. It is this misuse of statistics that we should focus on.



4 comments:

  1. The issue at hand in the EU debate is whether *unskilled and semi-skilled people in the EU who wouldn’t otherwise get a visa or asylum* in the UK should be permitted to come into the UK to work.

    If you separate out that set of people, then you find that *at best* they don’t reduce the wage at that level of work and at worst they do reduce the wage at that level of work.

    But far more important than that they don’t *increase* the wage a resident is going to get for a job, nor do they *increase* the chance of a resident getting a job.

    Given that we are not creating sufficient housing, nor improving our schools and hospitals to cope with the influx (e.g the level of language support and functional skills required in my local primary school is not something that is attracting additional central government funding), then the actual real costs of immigration are simply not in the figures.

    And then there is the impact on existing immigrant communities. There was a big spread on the front of the local Asian newspaper about how local curry houses may all have to close down because they can’t get the immigrants from the sub-continent they need with the required skills. Unfortunately there aren’t many skilled curry chefs in Romania. This problem seems to be more general:

    http://www.independent.co.uk/news/uk/politics/third-of-curry-houses-could-close-as-tough-immigration-rules-block-chefs-coming-to-uk-a6997831.html

    The excessive visa restrictions we have on the rest of the world – which are required to balance the lax ones in place to the EU – are stopping existing ethnic minority communities dealing fairly with parts of the world they originate from.

    So the oft-quoted figures relied upon by the left are skewed by aggregation, and skewed by omission.

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    Replies
    1. Something far too often neglected in the immigration debate - at least as far as working immigrants are concerned - is that eveyone entering the UK (or any other country) to work is benefiting someone, or ones, in the host country. Most obviously the employer, who is able to increase the business but also the clients/customers who are able to receive a service they would otherwise not get. Look at all the care and nursing homes, now often staffed largely by people from central and eastern Europe. Are local candidates being turned away from these jobs? Or is it rather that no one locally wants to do them? Should the homes be shut down if they rely on European workers?

      The curry chefs 'shortage' article struck me, too. You say "Unfortunately there aren’t many skilled curry chefs in Romania" but how about Bradford or Leicester? I have the impression that there are well over a million people from South Asia living, legally, in the UK (feel free to correct my figures). There are at least ten times more than that number who enjoy eating curries. Is it impossible to find sufficient decent chefs from that number, or is the argument about a 'shortage' more about maintaining a pipeline of new immigrants from some Bangladeshi and Pakistani villages, who can more easily be exploited and provide income and other benefits to the 'Godfathers' of specific communities?

      Delete
  2. Looks like you accidentally posted the same chart twice?

    ReplyDelete
    Replies
    1. Thanks - no idea how that happened!

      Delete

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