Two articles in The Economist

A bad error is in this, from 2007 (found when I was arguing that children ARE a public good):

First, it should be obvious that nations don't have to have pension systems highly sensitive to worker-to-retiree ratios. A shift to a system of mandatory personal retirement accounts immediately solves that problem.

It's an old joke that when The Economist is at its most certain it is at its most wrong, and this would back that up. It's not 'obvious' because such a shift does not solve that problem, either immediately or over the medium-term. If you think about it for a second it's obvious that it does not - imagine if no-one was born after you, and so when you reached 65 or 70 and retired there were no younger people in employment. What good would your personal retirement account be then? If it was in equities, those companies would be worthless, if it was in govt bonds, the govt would have defaulted, it was in cash that would be inflated away. Or simply think about it in terms of actual transactions - who would make you food, or provide healthcare?The only get out is if it was invested overseas, but that isn't the argument being made here.

Less of an error, but sloppy, is in this week's edition. In an article on French competitiveness, it says:

The Netherlands, with a fraction of its population, now exports more than France.

The Netherlands is an important trading nation, but a key reason for the Netherlands' remarkable export performance is its huge amount of "re-exports" (about 50% of exports). These are imports that come into a Dutch port via a trader, and are then rexported unchanged to another country, most commonly Germany. There is value-added by Dutch traders, but it is a small fraction of the nominal value of goods traded.

Now there might be good reasons to believe French competitiveness has declined and its export performance compared with the Netherlands might be one of them. But this particular statistic doesn't really tell us anything. After all the Netherlands also exports more than the UK, which has a similar population to France.

How to call bullsh*t on statistics part whatever

One of my first ever blog posts was noting a long-running error in the Economist about US car ownership. Here a similar version appears in The Atlantic. The claim is that US - so associated with car ownership - has fewer cars per 1,000 people than Europeans.

The claim is not wrong, as the figures provided show. But it is misleading, for the simple reason that in the US SUVs, or pickup trucks, which are predominately used for private transport, ie as a car, are counted as "light trucks". In Europe they are not. In both markets these vehicles have taken market share since the 1980s.

The first chart (apologies for the formatting and layout here) shows US car ownership per 1,000 people over time. It shows that car ownership peaked in the mid-1980s at about 550 cars per 1,000 citizens, and has steadily declined since to about 420.

The second chart explains why this has happened. It shows the number of "trucks" per 1,000 people, which has risen steadily to over 350 by 2010.

 Finally the third chart puts them together. The cars have declined, the trucks have risen, and the total has - as you might expect - steadily increased.

It should be said that some of these "trucks" are what we in Europe would call trucks - vehicles for carrying cargo. But the amount is relatively small - each year about 500,000 heavy trucks are sold, compared to 6 million or more light trucks.

The reason I spotted this one was simply because I have researched this area quite a bit over the years. But if there is a lesson, it's probably that statistics that don't seem to fit in with what you know about the world around you should be checked thorougly.

UK GDP per capita lower than in Q1 2004

UK GDP per capita, the most common measure of economic well-being, is now the lowest it has been since Q4 2003. I calculate in Q1 2012 it was £5,577 per head, just below the £5,584 per head it was in Q1 2004, eight years ago. It is 7% lower than at its peak in Q4 2007, but 1% higher than its low, at the peak of the recession in early 2009. 

Note these are my own calculations using real GDP and population, of which 2011/2012 is projection. 

Unemployment by Parliamentary Constituency

Duncan Weldon has an interesting piece in The Guardian on how unemployment is affecting different parts of the country differently, and how this could affect the election. This bit caught my attention:

The national rate of people claiming jobseekers' allowance is currently 5%. In Labour-held seats, the rate is an average 5.2%, while in Conservative-held seats it is considerably lower at 2.9%. In the 50 most marginal Conservative-held seats it is 3.6%, well below the national average and that of Labour-held seats.

The first thing to note is something seems a little wrong. If the national % unemployed (let's call it that for now but it is a narrow measure) is 5%, and the Conservative seats, by far the most numerous, only suffer 2.9%, then one would think the others would have much higher unemployment to bring the average up. But Labour's seats, the second most numerous, see only slightly higher unemployment than the national average at 5.2%. A quick calculation suggests this means the Lib Dems and other parties must have an unemployment rate of something like 11%, which isn't credible.

In fact although the UK claimant count is nationally said to be 5.0%, the individual constituency data  averages to 4.2% nationally, a number which fits the party figures much better [1].

The following table shows this national figure of unemployment in % for May 2010 and Feb 2012 and split out by constituency according to the party affiliation of its MP. The figures I calculate are slightly different than Duncan's, perhaps because I'm using old constituencies. I would use his if you want the accurate numbers.

Party	Unemployment May 2010	Unemployment Feb 2012	Change
Conservative	2.8	3.1	0.30
Labour	4.9	5.5	0.66
Lib Dems	2.9	3.3	0.45
SNP	3.0	3.5	0.45
PC	2.7	3.3	0.45
GB	3.7	4.2	0.50

It's no surprise that unemployment is higher in Labour constituencies than others. What might matter more in for the next election is the change in unemployment since the last election, which is shown in the final column. It is again true that since the last election unemployment has risen by more in Labour seats (0.66% points) than Lib Dems' (0.45%) and especially Tories' (0.30%)  - although note the Lib Dems and nationalist party seats have seen the biggest proportional rise.

With respect to the election though, what matters is the marginal constituencies. Here the situation is less clear-cut. In the 50 most marginal Conservative seats to Labour (on 2010 boundaries [2]) the unemployment rate has risen from 3.7% to 4.1%, an increase of 0.42% points. This is very similar to the national average. By comparison the 50 most marginal Labour seats to the Tories have seen a rise from 4.4% to 4.9%, an increase of 0.57% points. So I don't really see any obvious difference in the marginal seats than the national picture.

Here's a chart which shows this is more detail. Each dot represents one of the 100 most marginal Con/Labour seats. On the horizontal axis is plotted the Conservatives' lead over Labour in % points at the 2010 election. On the vertical axis the change in unemployment. There isn't a huge difference between them, except the trend for Conservative seats to have lower unemployment. Note the two labelled seats have presumably seen such a large increase because (I think) the data is not seasonally adjusted [3].

So my tentative conclusion is the marginal seats are seeing no better unemployment situation than any other, although Conservative seats in general are having a better time of it.

[1]The reason for this discrepancy is unknown to me, maybe a difference between claimants and the jobseeker's allowance or perhaps seasonal adjustment?)
[2] The new boundaries perhaps render this analysis pointless, but I think the unemployment changes will largely be the same given they are in the same area. But I'm not sure.
[3] Only one seat has seen a larger increase in unemployment than Blackpool South, and that is Bradford West (+2.4%)...