[FOUNTAIN]Lies, damned lies and..."I surveyed the average annual income of lawyers in Chicago in 1947. On average, lawyers who had graduated from university made $11,000, but the income of lawyers without college degrees, only high school diplomas, was $12,000. So is it true that the more lawyers study, the less money they make?"
That was the question thrown out by Robert Hooke, a statistician. The statistics were "true" at that time, when a legal practitioner required only a license to put out his shingle. But what the statistics failed to take into consideration was that lawyers with college degrees were almost all younger and less experienced. If the survey pitted a lawyer with a college degree against a lawyer without a college degree, both with the same number of years of experience, the income of the former was higher. Hooke called it "The Limit of Statistical Truth." The numbers may be correct but they don't represent the truth.
We have seen a bounty of such statistics that are merely sets of correct numbers that do not relate to reality. For example, letters of credit received were ballyhooed during the heady export-led industrialization of the 1970s. The letters of credit, which represented orders received by Korean factories, were benchmark indicators with which policymakers could gauge exports in the next three or four months. But these letters of credit, which amounted to 70 percent of trade settlements into the 1980s, lost their weight by the late 1990s. Exporters and importers chose to settle their books with cash, and letters of credit then amounted only to 30 percent of trade settlements. They had no more value as an economic indicator. For example, exports rose this year, but letter of credit arrivals have been contracting for 20 months.
The same goes for home ownership statistics. In Korea, home ownership has increased from 72 percent in 1990 to 94 percent in 2000. The Ministry of Construction said the rate would be 100 percent by the end of this year. So there is no housing problem? If not, why are housing prices soaring?
There could be several reasons, but the statistics are misleading. The figures exclude single persons that comprise a "household," but such households are increasing at a rate three times that of households with two or more persons. Include the singles, and the ownership rate is 87 percent. And rentals are increasing; homeowners who occupy their houses dropped from 79 percent in 1990 to 71 percent two years ago. Speculators have made the statistics less reliable.
If statistics are the basis of policy, Seoul should work as hard on their accuracy as it does on policy.
The writer is a JoongAng Ilbo editorial writer.
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