People understand statistics better than politicians think

Sarah O’Connor at the Financial Times: “In 2015 I took my reporter’s notebook to Liverpool because statistics suggested it was enjoying a jobs boom. The unemployment gap between the northern English city and the national average had shrunk to the smallest in a decade. When I mentioned that fact to people I met, I might as well have said the grass was pink.

“It’s certainly not our experience, I would say I’ve never seen poverty at this level,” was the response from the director of the local Citizens Advice Bureau. A woman who ran a small cake business said: “My cynical side thinks straight away they’ve probably got zero-hours contracts somewhere — [they] are a great way of cooking the books.”

I thought of that trip when I read a newly published study that uses an in-depth survey and focus groups to delve into the British public’s understanding of economics. The headline findings are bleak. Large parts of the public have misperceptions about how economic concepts such as the unemployment rate are measured and they are “sceptical and cynical” about data.

One obvious response would be to blame inadequate education and worry that economic ignorance allows people to be duped by demagogues such as Nigel Farage in the UK and Donald Trump in the US.

Economic literacy classes in schools would certainly be a good idea, especially since most of those surveyed were “deeply interested” in the economy and regretted not understanding the details. But there’s more to this story. The public live and breathe the economy every day. If their first response to a statistic such as the unemployment rate is to say “that doesn’t feel right” (a common response in the focus groups) then perhaps it’s the economists who are missing something….(More)”.