Australia Institute fabricates cherry picks data III

The story so far: The Australia Institute released a briefing note that contains some very interesting graphs. In the first instance it shows that Switzerland has a company tax rate of 8.5%. Then they appear to have arbitrarily excluded data from graphs while showing completely different data series to what they describe in the paper.

Today we look at their next graph.

AI graph 3

Again please note the axes aren’t labelled and the y-axis has a maximum value of 60000.

The Australia Institute describes this graph as follows:

Figure 3 shows a strong relationship between living standards and the education attainment of the labour force.

Before we proceed to show what they do to fudge their data, let me show you what that graph looks like using data that the Australia Institute claim to have employed.

AI corrected 3

Yes, well. Again it looks like they have excluded everyone with a per capita GDP of more than $60,000. To be fair, they did previously drop out Luxembourg but again have given absolutely no reason for dropping any of the other economies. But wait … there is more.

When preparing the data it was apparent that there were a number of former Eastern Bloc countries; Estonia, Hungary, Poland, Slovak Republic, and Slovenia, that had high educational attainment levels but relatively low living standards. Figure 4 was presented to show the impact of excluding those countries.
AI graph 4
Figure 4 shows that by excluding the former Eastern Bloc countries from the OECD data the relationship between education attainment and living standards is even stronger.

How cool is that? Arbitrarily decide to drop some economies from the dataset and then find an even stronger relationship than before? Why has nobody else ever thought of doing that? Oh, wait

That is a game everyone can play – so what happens when you throw out those economies with relatively low educational attainment and relatively low GDP per capita? (and also Luxembourg – it doesn’t matter if you include or exclude it, the result is much the same, but the graph looks better if you exclude it).

AI corrected 4

Looks like the very opposite relationship to what the Australia Institute reported.

Tomorrow – why this flawed research is so interesting. (Some people have pointed out that there are interpretation issues at stake here too. Yes, I agree. For now I want to focus just on the actual data and graphs.)

This entry was posted in 2016 election, Economics on the left, Hypocrisy of progressives, Politics of the Left, Taxation. Bookmark the permalink.

17 Responses to Australia Institute fabricates cherry picks data III

  1. RobK

    Sinc,
    You might just have stumbled onto something with that last graph.

  2. JC

    I don’t understand how anyone could work for that outfit. They spend all their time lying and fudging. It’s a disgrace.

  3. I am the Walras, Equilibrate, and Price-Take

    Oops!

    Damned facts, getting in the way of a Good Story.

    But it’s ok. They’re leftists, so they are allowed to do whatever they want.

    It’s for The Cause, you know. And The Cause is Good. And those who dare oppose The Cause are Evil. Because.

  4. Roger

    Fair go, Sinc.

    The Australia Institute’s mission statement mentions “participating forcefully in public debate”.

    How can they do that without fudging figures?

  5. AP

    None of these charts is legitimate. Not even Sinclairs. They remind me of the farce of share price deltas.

  6. AP

    Sorry, betas. Wrong Greek letter…

    Anyway, it is a comcept worth forgetting as it is complete rubbish.

  7. AP

    P.S. Why didn’t they exclude the EBCs when plotting company tax rate vs living standards?

  8. Sinclair Davidson

    Not even Sinclairs.

    These are not my “charts”. I’m simply reproducing what the AI claim to have done and then show an alternate version of their charts.

  9. candy

    I hope you checked this with Malcolm Turnbull, Prof D. The AA had a lot of polls saying 80 percent of people in the electorate of Warringah wanted TA to retire and go away. He won the seat with 67 percent.

    Now obviously the Australian Institute are deadset against TA. with false polling. Best check with M.Turnbull first before you criticise the Australia Institute, I think. They might get cranky with you.

  10. Peewhit

    Averages are the last thing that we should be looking at. The outliers are the ones to look at. What makes them special. Hong Kong and Singapore must be looked at. They live by their wits alone. Here in the magical land of Oz we have a head start with the natural resources, and probably half of our GDP is gifted to us. So look to the outliers to see what makes them special.

  11. mem

    Fudging graphs has become an art form in Australia and regrettably of government institutions particularly run by leftist appointees. My best example is Melbourne Water which, in order to present a convincing scenario to the public for a desalination plant, showed historical graphs that included a full 100% Thomson Dam right back until the early 1900’s. The Thomson Dam, as some will know, was only built in the late 1970’s and was first full (full being 80% of total capacity as recommended by its design engineers as its optimum) in 1981. By computer generating the graphs for all of Melbourne’s water back to 1900 including a 100% full Thomson Dam the graphs showing subsequent dramatic decline during drought were made doubly dramatic. (The Tomson makes up more than twice the combined capacity of all other dams supplying Melbourne). If Melbourne Water had shown the Thomson coming on stream in early 1980 and doubling capacity of water then it would have weakened the case for the desalination plant and favoured the future building of dams or possibly stymied the case for the desalination plant altogether. I might say that no one in the media has taken up this issue (hint,hint ) but it has cost Victorians millions and distorted planning for the future of Melbourne’s water supply. It is a great pity that statistics and statistical analysis isn’t a required discipline for becoming a journalist or a politician.

  12. AP

    These are not my “charts”. I’m simply reproducing what the AI claim to have done and then show an alternate version of their charts.

    Fair comment.

    When data points look like a shotgun scatter, you know any linear regression is meaningless rubbish.

  13. AP

    The outliers are the ones to look at. What makes them special.

    Absolutely!

  14. Pusnip

    Richard Denniss has form in twisting data and misleading or obfuscating for The Cause.
    I don’t know if he was involved in this particular AI paper, but either way, AI is a disgrace.

  15. JC

    Yes, well. Again it looks like they have excluded everyone with a per capita GDP of more than $60,000. To be fair, they did previously drop out Luxembourg but again have given absolutely no reason for dropping any of the other economies.

    In all honesty , as opposed to dishonesty, there could be a valid reason to throw out Luxembourg. A large number of people working in the bourg actually live in other countries across the various borders. They commute into Lux each day. This would distort their GDP per capita upwards I guess.

  16. Combine Dave

    Best check with M.Turnbull first before you criticise the Australia Institute, I think. They might get cranky with you.

    haha Zing!

  17. Tom W

    One fairly good reason for excluding Luxembourg, though perhaps not others, is that its gross national product is only about 70-75% of its gross domestic product. An enormous amount of value is created within its borders but accrues to overseas owners. (In short: it’s a tax haven). If you want to use GDP per capita as a proxy for living standards, then this is problematic. Ireland is in a similar situation, if not quite as acute. Excluding Luxembourg in cross country work on living standards on these grounds (although the problem also could be addressed, in my opinion more cleanly, by switching to a better proxy) is certainly defensible.

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