Sta Hungry Stay Foolish

Stay Hungry. Stay Foolish.

A blog by Leon Oudejans

The danger of using absolute or relative numbers

I was surprised by the outcome of my blog of last Thursday. The low relative number gave a very different (macro) perspective than its high absolute (micro) number. It’s too easy (for me) to blame the media or the source of those numbers. I think, feel and believe that our presenting of either absolute or relative numbers is a deliberate psychological choice.

In general, (financial) reporting of relative numbers (eg, %) draws less attention to the reporting – unless those percentages will supersede a certain psychological threshold (eg, > 15%). In (financial) reporting, high relative deviations on small absolute numbers may attract equal (management) attention as low relative percentages on high absolute deviations.

Hence, if you want to create awareness or attention then you should report the highest number, which can be either absolute or relative. If you want to minimise attention or awareness then you should report the lowest number of both. In financial reporting, it’s often common to report both unless general management has a distinct (psychological) preference.

Nearly all international corona related reporting is based upon (high) absolute numbers (eg, Johns Hopkins COVID-19 dashboard map). Clearly, these (high) fatality numbers create a grim picture and a sense of fear. That must be its psychological purpose. How else can epidemiologists or virologists expect a sense of urgency at the level of decision-makers?

However, decision-makers need a true and fair reporting for making sound decisions. Omitting relative numbers from the coronavirus reporting is probably a main reason why the coronavirus will cost all of us $12,000 billion or 12 trillion dollars (my June 30 blog). Hence, (high) absolute reporting creates the notion of a (high) absolute problem in need of a (high) absolute solution.

In the future (political) dissection of the coronavirus crisis, the above will be reversed: all attention will be focussed on its (very) low relative numbers, while conveniently ignoring the sense of urgency that was once reported and felt.

Possibly, the reporting of (low) relative numbers would have ignited an early debate on the problem and on the solution. However, the international race to the bottom (eg, # of infections, # of deaths) would have created another pariah, like Sweden (my blogs). Sweden is still defending its approach to the WHO (eg, Bloomberg).

“You can fool all the people some of the time and some of the people all the time, but you cannot fool all the people all the time.” An alleged (and probably misattributed) saying by Abraham Lincoln (1809-1865), the 16th president of the United States (1861–1865).

Murder by numbers (1983) by The Police

artists, lyrics, video, Wiki-1, Wiki-2

Note: all markings (bolditalicunderlining) by LO unless stated otherwise.

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