Statisticians may sometimes seem over-meticulous and detail-obsessed, but if anyone can see the wood for the trees, it’s them. By checking through detail, they are really just bringing everything together so that they can look at the big picture.
At the weekend, in an interview on Radio 4 the ONS’s chief economist Joe Grice said that the ‘did it/didn’t it?’ debate around the UK and double dip recessions was “counter productive” and that we’d all do better to worry less about shorter-term figures “whether one particular quarter was up a smidgen or down a smidgen” and instead stay focused on the big picture and the general direction of trends in the economy over time.
New figures suggest that the so-called double dip recession may never have happened and hearing that figures have been revised, the public (encouraged by the media) can be quick to assume mistakes have been made. Not so. Statisticians regularly fine-tune figures as new statistics i.e. new information becomes available. This may result in a revised judgement. In this case, new construction sector data showed that the economy had contracted less than originally thought in early 2012. Next month’s statistics will make things clearer but the revision seems enough to believe that the overall economy has narrowly escaped a second recession.
It seems that the less confident we are with numbers, the more over-excited we can get about detail and the more likely we are to stop seeing the big picture. This can and does happen in management more generally including in business/industry. We have all been in meetings where faced with a series of graphs concerning performance, managers zoom in on the one figure which stands out as not meeting expectation. Sales of one particular item down 30% this week/month rings alarm bells around the Board. Colleagues are commissioned to investigate and they, in turn, involve their teams in the endeavour to fathom the unknown whys and wherefores. Before you know it the figures are up again but hours of organisational time has been spent on that one figure. They would do much better to keep their eye on the big picture – numbers go up, numbers go down – statisticians don’t rely on point estimates to make an inference. It’s good statistical practice to spot outliers, but, generally, the overall trend is more important and what really matters.