By Kevin Meyer
It's been a long while, probably over a year, since I've done a Fun With Statistics post, but the WSJ gave me the perfect opportunity to dive into a pet peeve: calculation precision. Those engineers among us know what I mean having had the concept of significant figures drilled into us in class after class. Unfortunately much of the world is not so enlightened.
The underlying premise of Charles Forelle's article is the EPA fuel economy calculation that adds or removes cars from the Cash for Clunkers program, where 0.0001 miles per gallon was a discriminating result. As Forelle puts it,
After all, 0.0001 miles is about six inches, and, if you could count it, a car getting around 18 miles to the gallon would consume about half a drop of fuel in that distance. Such precision is futile when dealing with essentially unknowable quantities derived from rough real-world experiments and seasoned with debatable assumptions.
No kidding, but such is politics. Oops, sorry. I don't want to be branded an "evil-monger" or "un-American" or get added onto a White House "fishy information" spam list. Strange how protesting was patriotic only a few months ago. But where was I…
Oh yes, significant figures. For the non-numerical among you,
The principle is simple: When combining measured numbers, the final answer is only as precise the least-precise piece of data that went into it; you can't just add a tail of decimal places, even if they show up on the calculator. So a room that's 2.5 meters (two significant digits) by 3.87 meters (three) has an area of 9.7 square meters, though the two numbers multiply to 9.675.
So how about another abuse of the decimal:
Still, decimal places lend the aura of authority and the veneer of verisimilitude. So the modern world is awash in squishy numbers wearing the many-figured garb of faux precision.
The state of Montana reported three weeks ago that its unemployment rate for June "increased 0.1% to 6.4%." Did it? Maybe. The unemployment data come from the federal Current Population Survey, which interviews tens of thousands of people across the nation but only 1,200 in Montana — too few for a precise figure. The rate is derived from a statistical model.
Barbara Wagner, a state economist, admits the figure isn't precise. But, she says, "it is still our best guess at the exact rate."
Now that's a line to remember! I think I'll try that in my next financial review! "It's my best guess at the exact rate."
And finally, for those of you that are curious, as admittedly was I:
ver-i-si-mil-i-tude [ver-uh-si-mil-i-tood] – something, as an assertion, having merely the appearance of truth.
I'm biting my tongue…