Painting the corner

Found an old one sitting in my folder. This came from the Wall Street Journal in 2018.

At first glance, the chart looks like a pretty decent effort.

The scatter plot shows Ebitda against market value, both measured in billions of dollars. The placement of the vertical axis title on the far side is a little unusual.

Ebitda is a measure of business profit (something for a different post on the sister blog: the "b" in Ebitda means "before", and allows management to paint a picture of profits without accounting for the entire cost of running the business). In the financial markets, the market value is claimed to represent a "fair" assessment of the value of the business. The ratio of the market value to Ebitda is known as the "Ebitda multiple", which describes the number of dollars the "market" places on each dollar of Ebitda profit earned by the company.

Almost all scatter plots suffer from xyopia: the chart form encourages readers to take an overly simplistic view in which the market cares about one and only one business metric (Ebitda). The reality is that the market value contains information about Ebitda plus lots of other factors, such as competitors, growth potential, etc.

Consider Alphabet vs AT&T. On this chart, both companies have about $50 billion in Ebitda profits. However, the market value of Alphabet (Google's mother company) is about four times higher than that of AT&T. This excess valuation has nothing to do with profitability but partly explained by the market's view that Google has greater growth potential.

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Unusually, the desginer chose not to utilize the log scale. The right side of the following display is the same chart with a log horizontal axis.

The big market values are artificially pulled into the middle while the small values are plied apart. As one reads from left to right, the same amount of distance represents more and more dollars. While all data visualization books love log scales, I am not a big fan of it. That's because the human brain doesn't process spatial information this way. We don't tend to think in terms of continuously evolving scales. Thus, presenting the log view causes readers to underestimate large values and overestimate small differences.

Now let's get to the main interest of this chart. Notice the bar chart shown on the top right, which by itself is very strange. The colors of the bar chart is coordinated with those on the scatter plot, as the colors divide the companies into two groups; "media" companies (old, red), and tech companies (new, orange).

Scratch that. Netflix is found in the scatter plot but with a red color while AT&T and Verizon appear on the scatter plot as orange dots. So it appears that the colors mean different things on different plots. As far as I could tell, on the scatter plot, the orange dots are companies with over $30 billion in Ebitda profits.

At this point, you may have noticed the stray orange dot. Look carefully at the top right corner, above the bar chart, and you'll find the orange dot representing Apple. It is by far the most important datum, the company that has the greatest market value and the largest Ebitda.

I'm not sure burying Apple in the corner was a feature or a bug. It really makes little sense to insert the bar chart where it is, creating a gulf between Apple and the rest of the companies. This placement draws the most attention away from the datum that demands the most attention.

 

 

 


What does Elon Musk do every day?

The Wall Street Journal published a fun little piece about tweets by Elon Musk (link).

Here is an overview of every tweet he sent since he started using Twitter more than a decade ago.

Wsj_musk_tweets_alldaylong2
Apparently, he sent at least one tweet almost every day for the last four years. In addition, his tweets appear at all hours of the day. (Presumably, he is not the only one tweeting from his account.)

He doesn't just spend time writing tweets; he also reads other people's tweets. WSJ finds that up to 80% of his tweets include mentions of other users.

Wsj_musk_tweets_mentionsothers7

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One problem with "big data" analytics is that they often don't answer interesting questions. Twitter is already one of the companies that put more of their data out there, but still, analysts are missing some of the most important variables.

We know that Musk has 93 million followers. We already know from recent news that a large proportion of such users may be spam/fake. It is frequently assumed in twitter analysis that any tweet he makes reaches 93 million accounts. That's actually far from correct. Twitter uses algorithms to decide what posts show up in each user's feed so we have no idea how many of the 93 million accounts are in fact exposed to any of Musk's tweets.

Further, not every user reads everything on their Twitter feed. I don't even check it every day. Because Twitter operates as a 'firehose" with ever-changing content as users send out short messages at all hours, what one sees depends on when one reads. If Musk tweets in the morning, the users who log on in the afternoon won't see it.

Let's say an analyst wants to learn how impactful Musk's tweets are. That's pretty difficult when one can't figure out which of the 93 million followers were shown these tweets, and who read them. The typical data used to measure response are retweets and likes. Those are convenient metrics because they are available. They are very limited in what they measure. There are lots of users who don't like or retweet at all.

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The available data do make for some fun charts. This one gave me a big smile:

Wsj_musk_tweets_emojis9

Between writing tweets, reading tweets, and ROTFL, every hour of almost every day, Musk finds time to run his several companies. That's impressive.

 


Superb tile map offering multiple avenues for exploration

Here's a beauty by WSJ Graphics:

Wsj_powerproduction

The article is here.

This data graphic illustrates the power of the visual medium. The underlying dataset is complex: power production by type of source by state by month by year. That's more than 90,000 numbers. They all reside on this graphic.

Readers amazingly make sense of all these numbers without much effort.

It starts with the summary chart on top.

Wsj_powerproduction_us_summary

The designer made decisions. The data are presented in relative terms, as proportion of total power production. Only the first and last years are labeled, thus drawing our attention to the long-term trend. The order of the color blocks is carefully selected so that the cleaner sources are listed at the top and the dirtier sources at the bottom. The order of the legend labels mirrors the color blocks in the area chart.

It takes only a few seconds to learn that U.S. power production has largely shifted away from coal with most of it substituted by natural gas. Other than wind, the green sources of power have not gained much ground during these years - in a relative sense.

This summary chart serves as a reading guide for the rest of the chart, which is a tile map of all fifty states. Embedded in the tile map is a small-multiples arrangement.

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The map offers multiple avenues for exploration.

Some readers may look at specific states. For example, California.

Wsj_powerproduction_california

Currently, about half of the power production in California come from natural gas. Notably, there is no coal at all in any of these years. In addition to wind, solar energy has also gained. All of these insights come without the need for any labels or gridlines!

Wsj_powerproduction_westernstatesBrowsing around California, readers find different patterns in other Western states like Oregon and Washington.

Hydroelectric energy is the dominant source in those two states, with wind gradually taking share.

At this point, readers realize that the summary chart up top hides remarkable state-level variations.

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There are other paths through the map.

Some readers may scan the whole map, seeking patterns that pop out.

One such pattern is the cluster of states that use coal. In most of these states, the proportion of coal has declined.

Yet another path exists for those interested in specific sources of power.

For example, the trend in nuclear power usage is easily followed by tracking the purple. South Carolina, Illinois and New Hampshire are three states that rely on nuclear for more than half of its power.

Wsj_powerproduction_vermontI wonder what happened in Vermont about 8 years ago.

The chart says they renounced nuclear energy. Here is some history. This one-time event caused a disruption in the time series, unique on the entire map.

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This work is wonderful. Enjoy it!


A little stitch here, a great graphic is knitted

The Wall Street Journal used the following graphic to compare hurricanes Ida and Katrina (link to paywalled article).

Wsj_ida_katrina_hurricanes

This graphic illustrates the power of visual communications. Readers can learn a lot from it.

The paths of the storms can be compared. The geographical locations of the landfalls are shown. The strengthening of wind speeds as the hurricanes moved toward Louisiana is also displayed. Ida is clearly a lesser storm than Katrina: its wind speed never reached Category 5, and is generally lower at comparable time points.

The greatest feature of the WSJ graphic is how the designer stitches the two plots into one graphic. The anchors are two time points: when each storm attained enough wind speed to be classified as a hurricane (indicated by open dots), and when each storm made landfall in Louisiana. It is this little-noticed feature that makes it so easy to place each plot in context of the other.

Bravo!


Did prices go up or down? Depends on how one looks at the data

The U.S. media have been flooded with reports of runaway inflation recently, and it's refreshing to see a nice article in the Wall Street Journal that takes a second look at the data. Because as my readers know, raw data can be incredibly deceptive.

Inflation typically describes the change in price level relative to the prior year. The month-on-month change in price levels is a simple seasonal adjustment used to remove the effect of seasonality that masks the true change in price levels. (See this explainer of seasonal adjustment.)

As the pandemic enters the second year, this methodology is comparing 2021 price levels to pandemic-impacted price levels of 2020. This produces a very confusing picture. As the WSJ article explains, prices can be lower than they were in 2019 (pre-pandemic) and yet substantially higher than they were in 2020 (during the pandemic). This happens in industry sectors that were heavily affected by the economic shutdown, e.g. hotels, travel, entertainment.

Wsj_pricechangehotels_20192021Here is how they visualized this phenomenon. Amusingly, some algorithm estimated that it should take 5 minutes to read the entire article. It may take that much time to understand properly what this chart is showing.

Let me save you some time.

The chart shows monthly inflation rates of hotel price levels.

The pink horizontal stripes represent the official inflation numbers, which compare each month's hotel prices to those of a year prior. The most recent value for May of 2021 says hotel prices rose by 9% compared to May of 2020.

The blue horizontal stripes show an alternative calculation which compares each month's hotel prices to those of two years prior. Think of 2018-9 as "normal" years, pre-pandemic. Using this measure, we find that hotel prices for May of 2021 are about 4% lower than for May of 2019.

(This situation affects all of our economic statistics. We may see an expansion in employment levels from a year ago which still leaves us behind where we were before the pandemic.)

What confused me on the WSJ chart are the blocks of color. In a previous chart, the readers learn that solid colors mean inflation rose while diagonal lines mean inflation decreased. It turns out that these are month-over-month changes in inflation rates (notice that one end of the column for the previous month touches one end of the column of the next month).

The color patterns become the most dominant feature of this chart, and yet the month-over-month change in inflation rates isn't the crux of the story. The real star of the story should be the difference in inflation rates - for any given month - between two reference years.

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In the following chart, I focus attention on the within-month, between-reference-years comparisons.

Junkcharts_redo_wsj_inflationbaserate

Because hotel prices dropped drastically during the pandemic, and have recovered quite well in recent months as the U.S. reopens the economy, the inflation rate of hotel prices is almost 10%. Nevertheless, the current price level is still 7% below the pre-pandemic level.

 



 


Did the pandemic drive mass migration?

The Wall Street Journal ran this nice compact piece about migration patterns during the pandemic in the U.S. (link to article)

Wsj_migration

I'd look at the chart on the right first. It shows the greatest net flow of people out of the Northeast to the South. This sankey diagram is nicely done. The designer shows restraint in not printing the entire dataset on the chart. If a reader really cares about the net migration from one region to a specific other region, it's easy to estimate the number even though it's not printed.

The maps succinctly provide readers the definition of the regions.

To keep things in perspective, we are talking around 100,000 when the death toll of Covid-19 is nearing 600,000. Some people have moved but almost everyone else haven't.

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The chart on the left breaks down the data in a different way - by urbanicity. This is a variant of the stacked column chart. It is a chart form that fits the particular instance of the dataset. It works only because in every month of the last three years, there was a net outflow from "large metro cores". Thus, the entire series for large metro cores can be pointed downwards.

The fact that this design is sensitive to the dataset is revealed in the footnote, which said that the May 2018 data for "small/medium metro" was omitted from the chart. Why didn't they plot that number?

It's the one datum that sticks out like a sore thumb. It's the only negative number in the entire dataset that is not associated with "large metro cores". I suppose they could have inserted a tiny medium green slither in the bottom half of that chart for May 2018. I don't think it hurts the interpretation of the chart. Maybe the designer thinks it might draw unnecessary attention to one data point that really doesn't warrant it.

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See my collection of posts about Wall Street Journal graphics.


Aligning the visual and the data

The Washington Post reported a surge in donations to the Democrats after the death of Justice Ruth Ginsberg (link). A secondary effect, perhaps unexpected, was that donors decided to spread the money around; the proportion of donors who gave to six or more candidates jumped to 65%, where normally it is at 5%.

Wapo_donations

The text tells us what to look for, and the axis labels are commendably restrained. The color scheme is also intuitive.

There is something frustrating about this chart, though. It's that the spike is shown upside down. The level that the arrow points at is 45%, which is the total of the blue columns. The visual suggests the proportion of multiple beneficiaries (2 or more) should be 55%. There is a divergence between what the visual is saying and what the data are saying. Whichever number is correct, the required proportion is the inverse of the level shown on the percentage axis!

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This is the same chart flipped over.

Junkcharts_redo_wapo_donations

Now, the number we need can be read off the vertical axis.

I also moved the color legend to the right side so that the entries can be printed vertically, in the same direction as the data. This is one of the unspoken rules of data visualization I featured in my feature for DataJournalism.com.

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In the Trifecta Checkup (link), the issue is with the green arrow between the D corner and the V corner. The data and the visual are not in sync. 

 


Bubble charts, ratios and proportionality

A recent article in the Wall Street Journal about a challenger to the dominant weedkiller, Roundup, contains a nice selection of graphics. (Dicamba is the up-and-comer.)

Wsj_roundup_img1


The change in usage of three brands of weedkillers is rendered as a small-multiples of choropleth maps. This graphic displays geographical and time changes simultaneously.

The staircase chart shows weeds have become resistant to Roundup over time. This is considered a weakness in the Roundup business.

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In this post, my focus is on the chart at the bottom, which shows complaints about Dicamba by state in 2019. This is a bubble chart, with the bubbles sorted along the horizontal axis by the acreage of farmland by state.

Wsj_roundup_img2

Below left is a more standard version of such a chart, in which the bubbles are allowed to overlap. (I only included the bubbles that were labeled in the original chart).

Redo_roundupwsj0

The WSJ’s twist is to use the vertical spacing to avoid overlapping bubbles. The vertical axis serves a design perogative and does not encode data.  

I’m going to stick with the more traditional overlapping bubbles here – I’m getting to a different matter.

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The question being addressed by this chart is: which states have the most serious Dicamba problem, as revealed by the frequency of complaints? The designer recognizes that the amount of farmland matters. One should expect the more acres, the more complaints.

Let's consider computing directly the number of complaints per million acres.

The resulting chart (shown below right) – while retaining the design – gives a wholly different feeling. Arkansas now owns the largest bubble even though it has the least acreage among the included states. The huge Illinois bubble is still large but is no longer a loner.

Redo_dicambacomplaints1

Now return to the original design for a moment (the chart on the left). In theory, this should work in the following manner: if complaints grow purely as a function of acreage, then the bubbles should grow proportionally from left to right. The trouble is that proportional areas are not as easily detected as proportional lengths.

The pair of charts below depict made-up data in which all states have 30 complaints for each million acres of farmland. It’s not intuitive that the bubbles on the left chart are growing proportionally.

Redo_dicambacomplaints2

Now if you look at the right chart, which shows the relative metric of complaints per million acres, it’s impossible not to notice that all bubbles are the same size.


Pay levels in the U.S.

The Wall Street Journal published a graphic showing the median pay levels at "most" public companies in the U.S. here.

Wsj_mediancompanypay

People who attended my dataviz seminar might recognize the similarity with the graphic showing internet download speeds by different broadband technologies. It's a clean, clear way of showing multiple comparisons on the same chart.

You can see the distribution of pay levels of companies within each industry grouping, and the vertical lines showing the sector medians allow comparison across sectors. The median pay levels are quite similar with the energy sector leaning higher, and consumer sector leaning lower.

The consumer sector is extremely heavy on the low side of the pay range. Companies like Universal, Abercrombie, Skechers, Mattel, Gap, etc. all pay at least half their employees less than $6,000. The data is sourced to MyLogIQ. I have no knowledge of how reliable or valid the data are. It's curious to me that Dunkin Brands showed a median of $110K while Starbucks showed $13K.

Wsj_medianpay_dunkinstarbucks

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I like the interactive features.

The window control lets the user zoom in to different parts of the pay range. This is necessary because of the extremely high salaries. The control doubles as a presentation of the overall distribution of median salaries.

The text box can be used to add data labels to specific companies.

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See previous discussion of WSJ Graphics.

 


The ebb and flow of an effective dataviz showing the rise and fall of GE

Wsj_ebbflowGE_800A WSJ chart caught my eye the other day – I spotted someone looking at it in a coffee shop, and immediately got a hold of a copy. The chart plots the ebb and flow of GE’s revenues from the 1980s to the present.

What grabbed my attention? The less-used chart form, and the appealing but not too gaudy color scheme.

The chart presents a highly digestible view of the structure of GE’s revenues. We learn about GE’s major divisions, as well as how certain segments split from or merged with others over time. Major acquisitions and divestitures are also depicted; if these events are the main focus, the designer should find ways to make these moments stand out more.

An interesting design decision concerns the sequence of the divisions. One possible order is by increasing or decreasing importance, typically indicated by proportional revenues. This is complicated by the changing nature of the business over the decades. So financial services went from nothing to the largest division by far to almost disappearing.

The sequencing need not be data-driven; it can be design-constrained. The merging and splitting of business units are conveyed via linking arrows. Longer arrows are unsightly, and meshes of arrows are confusing.

On this chart, the long arrow pointing from the orange to the gray around 2004 feels out of place. What if the financial services block is moved to the right of the consumer block? That will significantly shorten the long arrow. It won’t create other entanglements as the media block is completely disjoint and there are no other arrows tying financial services to another division.

 

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To improve readability, the bars are spaced out horizontally. The addition of whitespace distorts the proportionality. So, in 2001, the annotation states that financial services (orange) accounted for “about half of the revenues,” which is directly contradicted by the visual perception – readers find the orange bar to be clearly shorter than the total length of the other bars. This is a serious deficiency of the chart form but this chart conveys the "ebb and flow" very well.