Thursday, June 16, 2005

St. Louis U Forecaster -- When does 6% =.5%? Lies, damn lies, and statistics

STLtoday - News - Columnists:
"It didn't sound right, but Strauss is the director of the new Simon Center for Regional Forecasting at St. Louis University. The stunning forecast was the Simon Center's first. What a way to start. Talk about an attention-getter. Job growth approaching 6 percent! 'That number is not only rosy, it's astronomical,' wrote business columnist David Nicklaus in Sunday's paper.

Even Strauss admitted the number seemed unrealistic. He told Nicklaus that he and his colleagues considered adjusting the forecast downward, but then decided they had to stick with the numbers. The Simon Center uses state of the art methods.

Now it turns out there was a mistake. As Nicklaus explained things in his column this Sunday, the computer was spitting out annual numbers and Strauss thought they were monthly numbers so he was multiplying the computer's numbers by 12. Consequently, the new projections show us 'enjoying' a growth rate of about 0.5 percent. That's a little down from the year the 0.6 percent we 'enjoyed' in the 12 months that ended in April. "
The coversheet of my statistics book in college had the "Lies, Damn Lies, and Statistics" quote from Mark Twain. Twain answers the question ... "What are the three types of lies in the world?"

I just wonder if this guy Strauss at the "Simon Center" still has a job. I'll bet he does. You see, he is in acadamia, where you don't have to be right if you are left. If you are in the ivory tower, you get a pass, because if you were any good, you would be in the REAL WORLD ... EARNING a living.


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