Tuesday, December 15, 2015

Alistair Meeks on the political impact of bad statistics

Alistair Meeks has a superb post on the Political Betting website today about the consequences of bad or inappropriate statistics, which is called "This is not America." The article is illustrated by a graphic showing how, of 29 countries, the sample of British people polled had the least accurate idea about how unequal the distribution of wealth in their country is.

The survey used a rough measure of equality based on the proportion of household wealth owned by the richest 1% of households, asked voters what they thought this number was, and then measured the difference between the average answer and the actual figure.

(There are much more sophisticated measures of inequality, but the average voter in most of these countries would never have heard of, say, the Gini coefficient and could not be expected to guess what value it took.)

The actual share of household wealth owned by the richest 1% of British households is 23%. Obviously that makes them much wealthier than the average person, but to a degree which is if anything somewhat lower than is typical of  modern developed countries (and massively lower than the proportion in some nominally Communist or ex-Communist countries including Russia and China!)

However, although voters in most developed countries think this proportion is higher than is actually the case, the gap between perception and reality is widest in Britain at 36% - the British sample thought the share of wealth owned by the richest 1% was about two and a half times higher than it is in reality. As Alistair says,

"Britain’s top 1% has accumulated less of the national household wealth than their equivalents in Germany, Sweden, Spain, Canada and Norway.  I doubt many British people would believe that.  British respondents were the worst guessers on this question of any of the 29 countries polled, giving the joint highest guess when in fact Britain’s top 1% have the joint fifth lowest share of their nation’s household wealth."

So why did people get this question so wrong - and so much more so in Britain?

Alistair argues that one possible explanation is that parts of the media in Britain (and some other English speaking countries) are  constantly quoting US statistics without making clear where they come from and causing people to misunderstand those figures as applying to their own nation.

As he says,

"British politics are very different from American politics, Britain’s social policies and problems are very different from those in the USA.  If we are to get the right policy solutions, the public need to have an accurate feel for the nature of our problems.  Politicians are going to need to think carefully about how to avoid cross-contamination of statistics across the Atlantic."

Quite. I am sure there are many other reasons for misconceptions, and those need addressing too, but bad or misapplied statistics are often one of the reasons underlying support for foolish or inappropriate policies.

You can read the full article here.


Jim said...

Why does wealth difference matter so much? its something else I don't understand. I mean I don't consider myself wealthy, but would I feel better if those with more than me had less? the answer is probably not.

To those less wealthy, then there are opportunities available to retrain and get up to my skill level (And much further if that is your aim). I know this because I blooming well done it, and continue to do it.

I honestly can not see why a wealth gap as such is such a problem, sure if the poorest can not afford absolute basics then this a real problem, but making the very rich, less very rich wont help them much, if at all.

when you hear some people speak its almost like they would prefer to see the poorest people even more poor, just so long as the richest were less rich by a larger margin.

Chris Whiteside said...

In my opinion, it is more important to eliminate absolute poverty than relative poverty:

e.g. a policy which makes the poor 10% richer and the rich 20% richer increases inequality but helps the poor in absolute terms even though they fall behind in relative terms, so in the absence of any other choices I believe someone who cares about the poor should support it.

However, in the world as it is, not as you or I would wish it to be, the perception that the rich are doing very well and everyone else very badly is one of the biggest drivers of support for socialist and left-wing parties and policies.

If people choose to support Jeremy Corbyn, the Labour party, or left wing policies on the basis of an accurate understanding of how unequal society is - and admittedly, there is great inequality in British society, though not as much as many people apparently think - it is their right to make that decision.

But if people support left-wing policies or parties because of incorrect information about how unequal society is, I am entitled to regard that wrong information as disastrous for Britain and the people who spread the wrong information as sabotaging democracy.

Jim said...

"it is more important to eliminate absolute poverty than relative poverty" I guess that is the clever, economic, way to say exactly what I did.

though the rest of your comment makes a lot of sense. Why would people not want to aid the very poorest to remove absolute poverty, rather than focus on wealth difference or "relative poverty" - that is the bit that makes no sense to me.

Thats the bit I cant grasp, see to me I earn £x and well if the managing director earns £x times 50 then to be honest I could not give a flying ****. Who really cares? the fact is so long as the lowest paid can afford the basics then does it matter how much someone else earns?

Now if the lowest paid are worse off than they would be on benefits (which can happen) then that is a real problem of the system, and one that must be sorted ASAP. Also if the lowest paid, or even the lowest benefit receivers need to resort to things like food banks that is a huge problem too.

its certainly a far bigger problem to worry about than the difference between the richest and poorest.

Chris Whiteside said...

Absolutely agree