Adjust, and adjust some more

This Financial Times report illustrates the reason why we should adjust data.

The story explores the trend in economic statistics during 14 years of governing by conservatives. One of those metrics is so-called council funding (local governments). The graphic is interactive: as the reader scrolls the page, the chart transforms.

The first chart shows the "raw" data.

The vertical axis shows year-on-year change in funding. It is an index relative to the level in 2010. From this line chart, one concludes that council funding decreased from 2010 to around 2016, then grew; by 2020, funding has recovered to the level of 2010 and then funding expanded rapidly in recent years.

When the reader scrolls down, this chart is replaced by another one:

This chart contains a completely different picture. The line dropped from 2010 to 2016 as before. Then, it went flat, and after 2021, it started raising, even though by 2024, the value is still 10 percent below the level in 2010.

What happened? The data journalist has taken the data from the first chart, and adjusted the values for inflation. Inflation was rampant in recent years, thus, some of the raw growth have been dampened. In economics, adjusting for inflation is also called expressing in "real terms". The adjustment is necessary because the same dollar (hmm, pound) is worth less when there is inflation. Therefore, even though on paper, council funding in 2024 is more than 25 percent higher than in 2010, inflation has gobbled up all of that and more, to the point in which, in real terms, council funding has fallen by 20 percent.

This is one material adjustment!

Wait, they have a third chart:

It's unfortunate they didn't stabilize the vertical scale. Relative to the middle chart, the lowest point in this third chart is about 5 percent lower, while the value in 2024 is about 10 percent lower.

This means, they performed a second adjustment - for population change. It is a simple adjustment of dividing by the population. The numbers look worse probably because population has grown during these years. Thus, even if the amount of funding stayed the same, the money would have to be split amongst more people. The per-capita adjustment makes this point clear.

***

The final story is much different from the initial one. Not only was the magnitude of change different but the direction of change reversed.

Whenever it comes to adjustments, remember that all adjustments are subjective. In fact, choosing not to adjust is also subjective. Not adjusting is usually much worse.

 

 

 

 

Hanging things on your charts

The Financial Times published the following chart that shows the rollout of vaccines in the U.K.

(I can't find the online link to the article. The article is titled "AstraZeneca and Oxford face setbacks and success as battle enters next phase", May 29/30 2021.)

This chart form is known as a "streamgraph", and it is a stacked area chart in disguise. 

The same trick can be applied to a column chart. See the "hanging" column chart below:

The two charts show exactly the same data. The left one roots the columns at the bottom. The right one aligns the middle of the columns. 

I have rarely found these hanging charts useful. The realignment makes it harder to compare the sizes of the different column segments. On the normal stacked column chart, the yellow segments are the easiest to compare because they share the same base level. Even this is taken away from the reader on the right side.

Note also that the hanging version does not admit a vertical axis. 

The same comments apply to the streamgraph.

***

Nevertheless, I was surprised that the FT chart shown above actually works. The main message I learned was that initially U.K. primarily rolled out AstraZeneca and, to a lesser extent, Pfizer, shots while later, they introduced other vaccines, including Johnson & Johnson, Novavax, CureVac, Moderna, and "Other". 

I can also see that the supply of AstraZeneca has not changed much through the entire time window. Pfizer has grown to roughly the same scale as AstraZeneca. Moderna remains a small fraction of total shots. 

I can even roughly see that the total number of vaccinations has grown about six times from start to finish. 

That's quite a lot for one chart, so job well done!

There is one problem with the FT chart. It should have labelled end of May as "today". Half the chart is history, and the other half is the future.

***

For those following Covid-19 news, the FT chart is informative in a different way.

There is a misleading statement going around blaming the U.K.'s recent surge in cases on the Astrazeneca vaccine, claiming that the U.K. mostly uses AZ. This chart shows that from the start, about a third of the shots administered in the U.K. are Pfizer, and Pfizer's share has been growing over time. 

U.K. compared to some countries mostly using mRNA vaccines

U.K. is almost back to the winter peak. That's because the U.K. is serious about counting cases. Look at the state of testing in these countries:

What's clear about the U.S. case count is that it is kept low by cutting the number of tests by two-thirds, thus, our data now is once again severely biased towards severe cases. 

We can do a back-of-the-envelope calculation. The drop in testing may directly lead to a proportional drop in reported cases, thus removing 500 (asymptomatic, or mild) cases per million from the case count. The case count goes below 250 per million so the additional 200 or so reduction is due to other reasons such as vaccinations.

Tip of the day: transform data before plotting

The Financial Times called out a twitter user for some graphical mischief. Here are the two charts illustrating the plunge in Bitcoin's price last week : (Hat tip to Mark P.)

There are some big differences between the two charts. The left chart depicts this month's price actions, drawing attention to the last week while the right chart shows a longer period of time, starting from 2012. The author of the tweet apparently wanted to say that the recent drop is nothing to worry about. 

The Financial Times reporter noted another subtle difference - the right chart uses a log scale while the left chart is linear. Specifically, it's a log 2 scale, which means that each step up is double the previous number (1, 2, 4, 8, etc.). The effect is to make large changes look smaller. Presumably most readers fail to notice the scale. Even if they do, it's not natural to assign different differences to the same physical distances.

***

These price charts always miss the mark. That's because the current price is insufficient to capture whether a Bitcoin investor made money or lost money. If you purchased Bitcoins this month, you lost money. If your purchase was a year ago, you still made quite a bit of money despite the recent price plunge.

The following chart should not be read as a time series, even though the horizontal axis is time. Think date of Bitcoin purchase. This chart tells you how much $1 of Bitcoin is worth last week, based on what day the purchase was made.

People who bought this year have mostly been in the red. Those who purchased before October 2020 and held on are still very pleased with their decision.

This example illustrates that simple transformations of the raw data yield graphics that are much more informative.

 

More visuals of the economic crisis

As we move into the next phase of the dataviz bonanza arising from the coronavirus pandemic, we will see a shift from simple descriptive graphics of infections and deaths to bivariate explanatory graphics claiming (usually spurious) correlations.

The FT is leading the way with this effort, and I hope all those who follow will make a note of several wise decisions they made.

• They source their data. Most of the data about business activities come from private entities, many of which are data vendors who make money selling the data. In this article, FT got restaurant data from OpenTable, retail foot traffic data from Springboard, box office data from Box Office Mojo, flight data from Flightradar24, road traffic data from TomTom, and energy use data from European Network of Transmission System Operators for Electricity.
• They generally let the data and charts speak without "story time". The text primarily describes the trends of the various data series.
• They selected sectors that are obviously impacted by the shutdowns so any link between the observed trends and the crisis is plausible.

The FT charts are examples of clarity. Here is the one about road traffic patterns in major cities:

The cities are organized into regions: Europe, US, China, other Asia.

The key comparison is the last seven days versus the historical averages. The stories practically jump out of the page. Traffic in Paris collapsed on Tuesday. Wuhan is still locked down despite the falloff in infections. Drivers of Tokyo are probably wondering why teams are not going to the Olympics this year. Londoners? My guess is they're determined to not let another Brexit deadline slip.

***

I'd hope we go even further than FT when publishing this type of visual analytics involving "Big Data." These business data obtained from private sources typically have OCCAM properties: they are observational, seemingly complete, uncontrolled, adapted and merged. All these properties make the data very challenging to interpret.

The coronavirus case and death counts are simple by comparison. People are now aware of all the problems from differential rates of testing to which groups are selectively tested (i.e. triage) to how an infection or death is defined. The problems involving Big Data are much more complex.

I have three additional proposals:

Disclosure of Biases and Limitations

The private data have many more potential pitfalls. Take OpenTable data for example. The data measure restaurant bookings, not revenues. It measures gross bookings, not net bookings (i.e. removing no-shows). Only a proportion of restaurants use OpenTable (which cost owners money). OpenTable does not strike me as a quasi-monopoly so there are competitors with significant market share. The restaurants that use OpenTable do not form a random subsample of all restaurants. One of the most popular restaurants in the U.S. are pizza joints, with little of no seating, which do not feature in the bookings data. OpenTable also has differential popularity by country, region, or probably cuisine. 

I believe data journalists ought to provide such context in a footnote. Readers should have the information to judge whether they believe the data are sufficiently representative. Private data vendors who want data journalists to feature their datasets should be required to supply a footnote that describes the biases and limitations of their data.

Data journalists should think seriously about how they headline this type of chart. The standard practice is what FT adopted. The headline said "Restaurant bookings have collapsed" with a small footnote saying "Source: OpenTable". Should the headline have said "OpenTable bookings have collapsed" instead?

Disclosure of Definitions and Proxies

In the road traffic chart shown above, the metric is called "TomTom traffic congestion index". In order to earn this free advertising (euphemistically called "earned media" by industry), TomTom should be obliged to explain how this index is constructed. What does index = 100 mean?

[For example, it is curious that the Madrid index values are much lower across the board than those in Paris and Roma.]

For the electric usage chart, FT discloses the name of the data provider as a group of "43 electricity transmission system operators in 36 countries across Europe." Now, that is important context but can be better. The group may consist of 43 operators but how many of them are in the dataset? What proportion of the total electric usage do they account for in each country? If they have low penetration in a particular country, do they just report the low statistics or adjust the numbres?

If the journalist decides to use a proxy, for example, OpenTable restaurant bookings to reflect restaurant revenues, that should be explained, perhaps even justified.

Data as a Public Good

If private businesses choose to supply data to media outlets as a public service, they should allow the underlying data to be published.

Speaking from experience, I've seen a lot of bad data. It's one thing to hold your nose when the data are analyzed to make online advertising more profitable, or to find signals to profit from the stock market. It's another thing for the data analysis to drive public policy, in this case, policies that will have life-or-death implications.