L1 Why numbers matter

Question 1

Who produced the famous theory with an error in it?

Answer 1

Reinhart-Rogoff

Question 2

what was the famous theory with an error in it?

Answer 2

the Reinhart-Rogoff theory

Question 3

what does GDP stand for?

Answer 3

gross domestic product

Question 4

what did they believe to be the threshold debt value of GDP where there would be a growth decline (in wealthy countries)?

Answer 4

90%

Question 5

when are austerity measures introduced?

Answer 5

when too much debt has been taken on

Question 6

what are the Reinhart-Rogoff theory influential in and what did it help justify?

Answer 6

politics + helped governments to make and justify difficult decisions (such as spending cuts)

Question 7

who was it that made many cuts as of the Reinhart-Rogoff theory?

Answer 7

George Osbourne (Chancellor of Exchequer, 2010-2016)

Question 8

we must investigate statistical claims carefully because…

Answer 8

…we may be lead astray

Question 9

what does GDP do?

Answer 9

measures countries size and health of their economy

Question 10

what do “when x happens, y happens” claims normally suggest?

Answer 10

causality

Question 11

what did causality lead George Osbourne to do?

Answer 11

jump to conclusions

Question 12

what does a high GDP mean?

Answer 12

that a country is doing well economically

Question 13

in reality, “when x happens, y happens” claims are typically…

Answer 13

…more complicated

Question 14

we must investigate statistical claims…

Answer 14

…carefully

Question 15

who criticised the Reinhart-Rogoff theory?

Answer 15

Thomas Herndon

Question 16

what did Herndon argue?

Answer 16

he disagreed with the the Reinhart-Rogoff theory - believing that there was no longer a ‘magic’ GDP threshold and that their 90% idea was phoney and didn’t exist

Question 17

when is a country deemed to be in a recession?

Answer 17

after 2 quarters (6 months) of negative growth

Question 18

percentage change =

Answer 18

an increase / decrease in relative terms in contrast to absolute change, expressed as a percentage

Question 19

percentage point change =

Answer 19

difference between final and initial values

Question 20

when dealing with stats and numbers in the news what are we are the audience?

Answer 20

responsible for interpreting them

Question 21

what was Tim Harford’s 6 step guide for dealing with stats and numbers in the new?

Answer 21

1) observe feelings
2) understand the claim (what’s being felt out / what does it really mean)
3) get the backstory
4) put it into perspective (is it a big number / is there a trend / is it significant)
5) embrace imprecision
6) be curious

Question 22

when dealing with numbers what perspective should we have?

Answer 22

think about is it a big number?

Question 23

what must we do to see if it’s a big number?

Answer 23

• find a relative comparison
• break it down into meaningful components
• consider the context (put it into perspective)
• for variables: consider the underlying distribution
• check for outliers: beware of cherrypicking

Question 24

what is the human brain bad at?

Answer 24

imagining what very big (or very small) numbers mean and look like

Question 25

who has the world’s highest GDP (+ but what do they do?)

Answer 25

the US - but they spend more than they earn

Question 26

is 90% GDP a big number (Reinhart-Rogoff theory)

Answer 26

depends - New Zealand = 19%
Switzerland = 41%

Question 27

example of where we are bad at understanding numbers:

Answer 27

2018 story where £50,000,000 worth of cocaine was seized at the airport working out to 500kg - so yes it was a big number

Question 28

what has austerity always been presented as?

Answer 28

a necessity, not a choice

Question 29

what did policy markers do when it came to austerity?

Answer 29

make decisions out of wants, not needs

Question 30

is austerity being a necessity not a choice the reality of the situation?

Answer 30

no

Question 31

all statistical claims have…

Answer 31

…elements of uncertainty

Question 32

why do all statistical claims have elements of uncertainty?

Answer 32

as many are based on averages

Question 33

the mean is a…

Answer 33

…one dimensional thing

Question 34

what does the mean fail to do?

Answer 34

tell us about the spread of data

Question 35

what does the mean suggest?

Answer 35

where the centre might be

Question 36

the mean is sensitive to outliers - true or false?

Answer 36

true

Question 37

the median is also a…

Answer 37

…one dimensional thing

Question 38

what do statistician sometimes call the median?

Answer 38

the ‘Geometric man’

Question 39

what goes a long way when looking at numbers, data and stats?

Answer 39

common sense

Question 40

we are sometimes purposefully being led astray - true or false?

Answer 40

true

Question 41

we should ……… stat claims.

Answer 41

investigate

Question 42

what may you sometimes do with outliers and extremes?

Answer 42

exclude them from analyses

Question 43

if outliers and extremes are to be excluded from analyses, then what must happen?

Answer 43

the reader must be told and explained as to why - such as; if there was a major anomaly

Question 44

austerity =

Answer 44

political and economic measures that aim to reduce gov. budget deficits through spending cuts / tax increases (or both)

Question 45

how is GDP calculated?

Answer 45

estimated as the sum total of a nation’s consumer spending, government spending, investments and trade balance

Question 46

variable =

Answer 46

a number, element or feature that is not fixed, but can vary from one measurement to another

Question 47

mean =

Answer 47

the arithmetic average (the sum of a set of numbers divided by how many numbers there are

Question 48

median =

Answer 48

the middle number when all are ranked

Question 49

outlier =

Answer 49

a particular extreme value in a dataset