I was surprised that looking back in my blog this subject doesn’t seem to have cropped up before – even though it is definitely something that I have – over the years – given some thought to. So now we will rectify that a bit.
What is less of a surprise is the content – I am sure that we are all aware of just how much our minds, our thinking, our decision making is driven by what we hear/read/see and this is something that advertisers – and those with much less honourable intentions – make use of all the time. Much has been written about this, however, I think it is worth recounting just a few things that have come to my notice over the last few days/weeks that illustrate this phenomena in a very clear way.
The specific trigger for writing now was when I was watching a TV programme which quoted some statistics that were seemingly undeniable – but then illustrated just how ‘inaccurate’ the picture painted was. The specific topic was Trump’s much hyped “no tax on tips” policy which may – or may not – come in with the next US budget. This sounds like a real win for those who receive tips until you understand the reality which starts with the fact that most of those who rely on tips already make little enough to avoid paying taxes anyway.
A second example – and so many people look to this announcement each month – is the inflation figure – much quoted as having risen slightly this month. What does that mean exactly – well it means that prices rose more in the year from January 2024 to January 2025 than they did in the year from December 2024 to December 2025. Yes, that is something that is not to be encouraged – however the index fell from from December to January – so in the last month prices had come down. This is conveniently not mentioned by many commentators – and it means that a particularly large change a year (or more) ago can have a distorting effect on the “rate of inflation”.
To illustrate this with a very much simplified example – imagine a world where inflation was at exactly two percent and that was what was reported each month. So prices are going up in a uniform way – obviously this would never happen quite so precisely in the real world but it serves to illustrate the fallacy of taking a single inflation rate as ‘news’. In one month one thing in the bucket used to measured inflation – say the price of cars – is reduced by 10% for the month as a “special offer” before it is put back to its previous level. What is the effect on inflation? Well, in that month we would see a reduction in inflation and in the following month a return to 2%.
Are there any other consequences? Well yes – exactly one year later we will get an inflation rise for a month which – looked at in isolation – is inexplicable. However the explanation when you see the big picture is simple – this is caused by the low inflation figure which resulted from the special offer on cars. In reality there are, of course lots of things all moving the numbers around – but this illustrates that the ‘big’ numbers are not necessarily caused by a recent change in costs.
This goes to show how easy it is to find yourself receiving what is not entirely accurate or complete information. Often – as in the case particularly of the inflation figure – the issue is that the whole thing is complicated and it ‘makes sense’ (at least for many people) to have a relatively simple thing to understand. It does mean that equating the inflation rate with the “cost of living” is slightly inaccurate – indeed it would perhaps be more accurate to equate it with the index itself ignoring the rate. However that brings its own raft of difficulties as well.
There is much, as I have said, that has been written about this sort of thing by people much more ‘expert’ in the whole psychology of this than I am. The cognitive biases that we each carry around with us are many and varied and they are exploited by some to lead us to think in a particular way and others pull the ‘meaning’ out of statistics without really understanding what the numbers are representing.
Of course, it is not just the presentation of these sort of statistics that is dependent on the way it is said – any “news” outlet (and I put the news in quotes because I am not limiting this to what might be termed traditional media) will put their own ‘spin’ on what is being reported and it is always easy to find conflicting interpretations – and this goes back to my previous posts about whether ‘truth’ matters and what exactly can be termed ‘reality’.
The examples again abound, but it never ceases to astound me that there always seems to be someone who can find an explanation of something that I have seen with my own eyes that contradicts my own interpretation. Sometimes these are easily disproven, other times it can make you question whether you are right or wrong – and that in itself can be a good thing since setting yourself up to do some critical thinking like that can be helpful.
The recent rise in energy prices was touted as something bad – and by many measures it was. However, what was omitted was that the cost of energy is down from last year and down a lot from the year before. So yes – it was an unwelcome rise in costs (viewed in terms of recent prices) but overall there was a certain amount of good news that was not, perhaps, emphasised enough. Add that to the fact that the predictions are for a further fall in three months time and we get a general picture not of misinformation or disinformation but missing information.
It reminds you to avoid judging events based on your prior biases and expectations – instead to consider alternative interpretations of what you have just seen happening. Once again, there are more nuances to this in that many “news” outlets in an attempt to retain/enthuse/rile up their own followers will sensationalise the way in which the “news” is presented so even those which are delivering “news” that is compatible with your own views will need to be filtered with a generous dose of reality.
All of this together does mean that whilst we are living in a world where data is available very widely, information is more difficult to separate from falsehoods – deliberate or accidental – and knowledge can be extremely difficult to extract from that.