Lies, Damn Lies and Statistics ­ Blog ­ ISAA

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Lies, Damn Lies and Statistics

Earlier this week the Commonwealth Bank released the latest report in its State of the States series. This is a quarterly series of economic statistics focusing on eight different indicators of economic performance aggregated to the state and territory level.


Reports like this usually attract considerable media attention that almost always fails to highlight the inaccuracies inherent in the averaging and inappropriate comparisons involved. Adding Moree to Mosman and dividing by 2 is unlikely to provide a meaningful outcome. Comparing the ACT to Western Australia is like comparing a dinghy to an oil tanker – they both float, but there the comparison ends.


It seems to me that such comparisons are entirely meaningless and much time and media space is wasted on them. They provide a store of spurious argument for those with ideological intent and/or vested interest and they can do much damage by masking the real world and providing apparent support for myths. For example, it is frequently reported that the ACT has the highest wages in the country based on ABS data of average weekly earnings compiled at state and territory level. This promotes the “fat cats in Canberra” world view while distracting attention from Point Piper and Vaucluse, lost in the averaging of NSW. 


Perhaps it's just that reporting at the level of LGA or suburb or postcode or statistical division or federal electorate is too expensive and perhaps nobody is interested any way.


Having said that, it was interesting to discover a recent publication on of the 25 richest suburbs in Australia based on taxation data, all of which are in Sydney, Melbourne and Perth (none in Canberra!). Thirteen of these suburbs are represented in the Federal Parliament by Prime Minister Abbott, Treasurer Hockey, Foreign Affairs Minister Bishop and Communications Minister Turnbull, arguably the senior members of the Liberal Party and of the Government. Of the remaining suburbs, 10 are represented by other Liberals. Only 2 of these suburbs are represented by the ALP, Balmain by Tanya Plibersek and Albert Park by Michael Danby. This information may be helpful in understanding the economic initiatives of the current Government.

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