Uses and Misuses of Statistics

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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