The deadly lure of data massaging

Suh Kyoung-ho
The author is an editorial writer of the JoongAng Ilb.

During the final year under President Lee Myung-bak in 2012, rivaling parties wrestled over the liability for income disparity ahead of the presidential election. The Gini coefficient, a barometer of income distribution, came under the spotlight. Statistics Korea created an upgraded Gini index, based on the household financial welfare survey, to replace the old Gini index drawn from the household income and expenditure survey.

While the old survey was conducted on 8,700 household samples, the new one sampled as many as 20,000 households. The former survey had problems as it could not fully reflect the income of high-income earners — and its rate of no response was too high. The new survey expanded the samples and better reflected the financial condition of high-income earners. The Lee administration persistently claimed that Korea’s income disparity improved, with the Gini index at the middle among OECD member countries. But when the results of the upgraded survey were taken into account, Korea’s Gini index fell to the bottom.

Statistics Korea publishes the calendar for its annual data releases at the beginning of each year. It was supposed to report the findings from the new survey that year on Nov. 9, but the data was made public on Dec. 22 — three days after the Dec. 19 presidential election. The new Gini index was also excluded. The government could not avoid the criticism for data distortion.

On June 30, 2021 — the fourth year of Moon Jae-in’s presidency — members of the Citizens’ Coalition for Economic Justice criticize his liberal administration for manipulating housing data after the civic group found evidence that it manipulated prices of apartments in Seoul to make them look even lower than real prices in the market.

The misdeed was later dug up and reported by the leftist paper Hankyoreh in June 2013. The controversy led to the revision of the Statistics Act. A bill, which includes a provision banning the sharing of public data before publication and use beyond the original purpose in any way — was proposed by Rep. Kim Hyun-mee in July 2013. Kim’s version was integrated with the government’s version and passed the National Assembly in December 2015. The amended Statistics Act mandated neutrality in data and prohibited any use of outside pressure. The statistics office and other institutions involved in compiling statistics have been barred from disclosing their data before they are publicly released. The Board of Audit and Inspection (BAI) was able to sanction the Korea Real Estate Board in its investigation on statistics manipulation last week as a result. Kim’s motion as a lawmaker came after her deed as the land minister later in the Moon Jae-in administration.

The revelation from the BAI’s interim report was shocking. The questionable government data on housing, income and employment under former president Moon Jae-in — already controversial during the time — were misrepresented under pressure from the Blue House and senior officials, according to the finding. The statistics results were also distorted. The Ministry of Land, Infrastructure and Transport had threatened the Real Estate Board under its umbrella to reduce the organization and cut its budget if it did not cooperate. The union of the estate board reported the Blue House and Land Ministry’s interference to the police. The presidential office meddling on household finance data that the BAI uncovered took place under Statistic Korea chief Hwang Soo-kyung. Hwang had championed independence in statistics and was ousted so that the Blue House and the statistics office could have more freedom to warp the data. We now understand why Hwang had a teary press conference after she was replaced. “Statistics must not be abused for political purpose,” she said before stepping down.

The report that the former president quoted Sunday while claiming that the employment rate — the youth employment rate, in particular — was the highest under his term was written up by Kim Yoo-sun, former head of the Korea Labor & Society Institute who chaired a special committee on income-led growth under Moon. Kim last year released a committee-backed e-book titled “Income-led Growth, Unfinished Journey.” But the book mostly celebrates the achievements under Moon, which came from his “overzealous” ambition to generate fast results during a single five-year presidential term, noted Myongji University Prof. Won Seung-yeon. The eagerness had led authorities to cherry-pick and twist data to blind policymakers.

The officials who served under Moon and the Democratic Party accuse the BAI of auditing with political bias. The investigation was not only extended three times but also mobilized its special bureau. The interim findings were also announced without going through the usual audit review committee. The truth would lie somewhere between data distortion and political inspection.

Statistics officials describe the term under President Roh Moo-hyun as the best year for independence in statistics. Roh vowed to not see the data before they are publicly released. The conservative and liberal administrations after him were all suspected of tempering with statistics to make it in their favor, although there were some differences in the degree.

The neutrality of statistics should not rely on the will of the president. The fortress over statistics must be re-established so that independence of government data cannot be touched no matter what.