Archive for March 27th, 2012

Uses and Misuses of Statistics

March 27, 2012

A nice and funny speech by RBI DG KC Chakrabarty on the topic.

He uses some very funny examples on how people misuse stats. Sample this:

In article about cats appeared in The New York Times’ on August 22, 1989. It stated, “The experts have also developed startling evidence of the cat’s renowned ability to survive, this time in the particular setting of New York City, where cats are prone at this time of year to fall from open windows in tall buildings. Researchers call the phenomenon feline high-rise syndrome.” Statistics were like this: from June 4 through November 4, 1984, 132 such victims were admitted to the Animal Medical Centre and most of the cats landed on concrete and most survived. From the data on the distance of the fall for 129 of the 132 cats, it was observed that the falls ranged from 2 to 32 stories. Only one of 22 cats that plunged from above 7 stories died, and there was only one fracture among the 13 that fell more than 9 stories. But how a cat will survive of a fall from a great height defying gravitation? Such description generally does not push one to scrutinize the statements till it was understood that majority of the cat owners do not report these incidents to any medical centre and believe that other people probably don’t report their cats’ deaths, either. Therefore, the error seemed so obvious that sample was not representative and there was data reporting problems.

Then this very usual error on inflation reporting:

Let me now give you an example from the banking world. The concept of inflation is often misunderstood by people. You would often hear this refrain from many persons that despite RBI claiming that inflation has come down in the recent past, the prices have not come down. So, what is the truth? Well, the truth is simply that inflation is indicated as a percent change, so even when this percent is declining, all it means is that the prices are rising at a slower rate, but they are still rising! The prices would come down only when the inflation becomes negative.

For stats to be made useful, we need to be info literates:

 In conclusion, we must ask ourselves as to why a quotation like “ Lies, Damned Lies, and Statistics”  as mentioned by me earlier is made about the subject of statistics. In my opinion, it is because the society is illiterate, i.e. it is information illiterate. Information literacy, which most people misunderstand, is the third generation of literacy. The first generation of literacy is when you know how to read and write. The second generation of literacy is when you are computer literate, but it is not enough to be just first or second generation literate. When transiting to a knowledge society, it is critical for all of us to be information literate or be third generation literate. And, one of the purposes of statistics is to bring about information literacy in the society. If that does not happen then statistics can be used to prove or disprove anything and it is the subject of statistics which would bear the burden of ridicule. So, it is up to all of us, faculty, students and practitioners alike, to redirect our efforts towards spreading information literacy in the society. Institutions associated with teaching and training of statistics have a more important role to play in that direction….

 

 

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Impact of Global and European Crisis on Indian Economy

March 27, 2012

A lot has been written already on this.

In case people are still looking for more stuff on the topic, here is a nice speech by Anand Sinha of RBI. It has some nice graphs and a timeline of the crisis and impact on Indian economy and financial markets.

His 3 takeways from the crisis:

  • Takeaway 1: Too much of anything is bad
  • Takeaway 2: Models are not absolute
  • Takeaway 3: Finance should serve the real sector and not the converse
Hmm..

The Manhattan Grid – an urban planning innovation

March 27, 2012

Museum of the City of New York is celebrating the 200th anniversary of the Commissioners’ Plan of 1811, the foundational document that established Manhattan’s famous street grid. There is a review of the exhibit at NYT and a super article in city-journal by James Panero.

The Grid was not really a first time but the way it was executed in Manhattan is a super lesson in history of urban planning. Panero says:

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Saving Capitalism and Democracy

March 27, 2012

A nice interview of Robert Reich of UCB.

The key of the interview is this  linkage of  rising inequality threatening US capitalism system and more troubling the US democracy. The policies and the capitalism system have increasingly become favorable to the top 1% which has amassed more and more wealth in the last 30 years. The everyday richer public in turn is driving the political agenda threatening democracy. The thread of the society has shifted from being morally right to plain greedy:

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