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Statistics and liars

(Title: "Where does your gasoline dollar go?")

Anyone who picked up the newspaper on Tuesday would have seen this ad from everyone's whipping post, i.e. the Oil Industry.  Unfortunately, they did not help their cause with this sloppy and deceptive piece of work.

The key problem here is: what is the base?  The title of the full-page ad seems to suggest that it is the retail price of oil.  It is perhaps telling the story that 55% of the price went to raw materials, 26% to various "friction" in the system and 19% went to the government. 

Discerning readers would immediately wonder if any of that money ever went to any human being.  Further, one might wonder if these companies ever give dividends to shareholders.  Or if they re-invest any of the profits.  Just to name a few omissions.  In assigning each dollar to a use, some dollars became MIA. 

Moreover, the most crucial piece of data required to interpret this chart is unavailable.  55% of one million is very different from 55% of one hundred billion, for example.

This chart is one of those that gives statistics an undeserved bad rep.

Reference: API website