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Why have we become so bamboozled by numbers?

by Shabnam Mousavi
Posted on October 10, 2019

In a particularly apt episode of the 1980s comedy show Yes, Prime Minister, rehearsing for his first public broadcast, the novice prime minister asks: “Is it OK to mention figures?” The TV director replies: “Yes. Practically no one takes them in and those who do don’t believe them, but it makes people think you’ve got the facts at your fingertips.”

Like many other quips from the show, this witty remark still rings true today. If a picture speaks a thousand words, a number speaks at least two thousand: it removes the need for explanation, and it signals precision, knowledge and truth. After all, numbers don’t lie. Or do they?

Official figures are produced to serve particular ends. Their names are mere labels, with no connection to infallible underlying stable properties. Most of the time, the statistics that politicians and the media quote do not reveal scientific facts.

Consider, for example, the pressing matter of national debt. Different welfare benefits make up about a third of UK spending. Normally, these payments are increased annually by the inflation rate to maintain their real purchasing power. Since April 2016, however, this increase was eliminated by imposing a benefit freeze. That is, the government kept benefit payments constant, instead of increasing them with inflation. This is an element of a government austerity policy that has sparked heated opposition.

Interestingly, the US has also curbed benefit payments, but in a much more subtle way, which has therefore attracted less opposition. It did so by changing the way inflation is calculated, with the aim of making inflation seem smaller. This example demonstrates the flexibility of statistics.


Inflation: an example

So how is inflation traditionally calculated? First, the government records the change in the price of a basket of goods consumed by a typical urban family of four over a year (this is called the consumer price index, or CPI). As prices go up over the year, the basket becomes more expensive. For example, if the basket goes from US$100 to US$104, then the inflation rate is 4%.

Inflation is calculated by keeping the contents of the basket the same. But some economists argue that people do not consume the same goods as prices change; they replace items that have become more expensive with items of lower price. So in the name of reflecting actual consumer behaviour, US government economists proposed to replace, for example, pricey oranges with less expensive apples in the consumption basket. This led to the calculation of a smaller inflation rate. And so by a mere change in the definition of the basket, President Barack Obama reduced government spending considerably in 2014. As a result, benefits and in turn the purchasing power of millions was reduced.

Measures of inflation aren’t really scientific.

These are not the only two versions of inflation. Many varying measures of it can be calculated to serve specific goals. For instance, it has been argued that the elderly have a higher change in the price of their regular consumption as a result of the high cost of medical care, and so deserve an increase in their benefits at a higher rate than the general population.

The same relativity applies to rankings and scores more generally. Think about employee evaluations, school rankings, movies, restaurants, consumer satisfaction. These are figures that have real effects on most people’s lives. The list of such figures is steadily increasing as more numbers can be produced faster and easier with the advancement of digitisation.


A historical view

Human fascination with thinking about facts and values in terms of numbers is a relatively new obsession. Take the evolution of economics. In 1700s, the father of modern economics, Adam Smith, wrote extensively on both morality and economic order in society. This was an economics that took a holistic view.

But soon, economics started vying to be recognised as a science, claiming to follow rigorous scientific methods. Whereas economics students in the mid-20th century learned about the history of economics and the various ways of calculating value, most economics students today are taught only one form of economics.

Public taste has changed: the focus has turned from an emphasis on quality to verifiability by quantification. It tends to be thought today that credibility demands logic and logic is processed, well, not by the heart. In this way, numbers have become our best reliable benchmark providers.

Nowadays, we are habituated to look for scores instead of holistic accounts. We want to see how many stars have been awarded to the places we want to travel to, the schools we send our children, the food we eat, and everything in between. Meanwhile, we worry about our financial credit score, our exam results, our financial value to our workplace or the numerical value of our carbon footprint.

The convenience of receiving condensed information in numbers has begun to outweigh the fear of what is sacrificed when we focus on quantification. For example, pushing schools to teach in order to pass tests because they will are evaluated on exam results has led to lower education quality. Similarly, performance scores for work evaluation has led to myopic pursuits by employees at the cost of long-term gains for both the individual and the workplace. In general, single scores, such as averages, simply ignore the nuances that differentiate us from machines.


What next?

Every day, all sorts of numbers are cooked up in the many offices of governments, corporations, banks, academic and business institutions, for profit and not-for-profit organisations, schools, hospitals, and so on. These numbers are supposed to provide us with verifiable information in concise formats. This is an enormous industry of our times.

Its function is supposedly to make direct comparisons possible, as long as a given term has become a convention and has been standardised to be measured in the same way across report producers.

Numbers are largely viewed as holding the truth. But this is an unrealistic expectation. The validity of a number is bound to the limits of the defined structure of its production, and its existence always serves a special purpose. We would do well not to take any number at its face value.

So next time you come across a number, you would be wise to consider how it’s calculated, and who by. Because it’s wise to suspect that it might not have your best interests at heart.The Conversation



Shabnam Mousavi, Associate Scientist, Max Planck Institute for Human Development

This article is republished from The Conversation under a Creative Commons license. Read the original article.