Tuesday, April 21, 2009

It’s All in the Data

In his April 17, 2009 column in the New York Times, Paul Krugman analyzes the evidence that an economic recovery might be starting, offering “four reasons to be cautious about the economic outlook.”

For students of data-based decision making, this analysis provides an insight into the role of interpretation of data provided. For example, Krugman shows how optimists might be missing some important data in their analyses or choosing to ignore it, stating that “Things are getting worse” based on the most recent reports from the U.S. Federal Reserve Bank’s many districts.

He raises similar concerns about bank profits, noting how a change in the reporting period has removed one of the most difficult months from one bank’s quarterly report and, as a result, made the performance appear significantly data.

In other words, yes—data is important in making decisions, but the data needs to be sound.

Read the full column at http://www.nytimes.com/2009/04/17/opinion/17krugman.html?_r=1&ref=opinion

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