(2024-11-01) Davies Made Up Numbers Are Just Pretend

Dan Davies: made up numbers are just pretend. Once more they awarded a Nobel Prize (in Economics, but still) at least partly for something I consider to be actually embarrassing. In this case, the practice of carrying out econometrics using an “index” of “institutions” on the left hand side.

Guys, it’s just a number that somebody made up! I mean, I suppose that as an accounting influencer, I have to say that nearly all statistical data is to some extent invented, that coding systems and collection practices are ideological rather than neutral and the creation of “objective” data is often a crucial tool of rhetoric.

But when you’re using the Freedom House Index Of Effective Property Rights[1], and asking “why is France a 3 and Germany a 4? If America is 2 and Cuba is 8 does that mean America is four times better? Could somewhere be 3.5 and if not why not?”, then … all those questions are potential showstoppers from a statistical point of view, but more importantly these are just numbers that somebody made up!

fundamentally they, and their boss, knew how the rankings were going to have to look.

You put the rabbit in the hat, then you took the rabbit out of the hat; the statistical analysis is just your original argument.