Business Columns & Blogs

Economic numbers can be enlightening and misleading

A century ago physicist Lord Kelvin argued that numerical data is fundamental: “When you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind.”

Economists take this to heart. Few economic studies avoid data in numbers. But while numbers impose discipline on scholarship, they also introduce pitfalls.

Take killings by police. From recent news, one might conclude that these are frequent. But just how frequent? Following the shooting of Philando Castile near my home, a friend asserted that a U.S. resident is 400 times more likely to be killed by police than someone in the United Kingdom.

That is a striking number, so I checked it out.

It is roughly true, but there always are complexities. Killings by police indeed are more common here than in Britain. But U.S. numbers are not precise. FBI statistics do not have a separate category for these killings. No law that requires local law enforcement to report such deaths. There is a category for “justifiable homicides” but its definition does not overlap closely with killings by police.

Given deficiencies in the data, two newspapers and some nongovernmental organizations now tally such incidents. They come up with 900 to 1,500 such deaths annually among 330 million Americans.

That highlights an important point. If one compares across states or across nations, one has to adjust for differing population sizes and express data as rates per 100,000 or million population, rather than annual totals.

Care also is needed when there are small changes in low levels of something. The U.K. had only five incidents in 2013 in which police fired a shot. There were only three in 2014. That is a 40-percent decline in police firing weapons. But that is probably just random variation.

Not all resulted in deaths. The U.S. population is roughly five times that of the U.K. So 1,500 deaths in our country would be a rate equal to 300 there.

Over the same period, annual incidents of shots by Dutch police increased from 15 to 25. Based on population, Netherlands police use firearms 32 times that of the U.S. But does that mean it is a European version of the Wild West? In both countries, police shooting guns is extremely rare.

This bit of information, that police shooting or killing is far rarer in another country than here is mentally striking. But it doesn’t explain much about why the difference exists. Nor does it tell us anything about trends.

The inadequacy of underlying information makes it as difficult to compare U.S. deaths at the hands of police over time as it is between different countries. There is evidence that the rate of such deaths has increased somewhat over time, but the data is simply so poor that it is hard to draw firm conclusions.

The data problems are evidenced by the fact that The Guardian newspaper tabulated 1,134 such deaths in our country for 2015 while The Washington Post, in a similar effort, came up with only 990. This was only for one year. Going back in time is difficult, and the results of news searches become more tenuous. So one cannot say much about long-term trends.

One can categorize these media-tabulated numbers. African-Americans were killed at a rate of seven per million, Hispanics and Native Americans at about 3.5 and whites at about 2.9 per million. But there is no reliable tabulation of differing circumstances of the shootings, i.e. whether it was in the course of commission of a verified crime or as a result of a traffic stop.

There are similar intricacies of other data.

There are some areas, such as the “vital statistics” of births, deaths and illnesses, in which data definitions and collection techniques are very standardized and have been in place for decades. Comparisons among states or nations or between earlier and later years generally are easy and reliable. There still are a few quirks however in something as basic as infant mortality, in that some European nations still classify all deaths of children born live before a certain length of gestation as a stillbirth while others tabulate it as an infant death.

The “national income and product accounts” that include “gross domestic product,” are standardized and are reliable and comparable for wealthy countries. There still are some definitional differences between nations in labor market data, such as unemployment rates, but many nations now publish what the headline rate would be using other definitions. One has to delve into the back pages of monthly reports to find the tables, but the information is available.

Just because numbers exist does not mean understanding them is easy. A few years ago, controversy arose over a study showing economic growth suffered when the ratio of government debt to GDP passed 90 percent. There was a spreadsheet error that, when corrected, changed the results. But it depended heavily on small nations very different than the United States. Applying results would be like reaching conclusions about corn production from a study of barley, radishes and begonias.

Similarly many economists cite research on how immigration affected unemployment that finds the effect small. But it turns out the work largely focused on one city. To conclude that what is true for one city therefore is true for the whole country is a “fallacy of composition” warned against in every intro econ course. But many fell into the error.

Lord Kelvin might have been right that in the absence of numbers, knowledge is meager. But having numbers is no guarantee that one’s conclusions are full or correct.

St. Paul economist and writer Edward Lotterman can be reached at