Eoinomics: committing Worstall's fallacy
Posted by Christie Malry on November 29, 2011 at 9:49 pm
Eoin commits an appalling fallacy:
Today's data shows that we are all in the shit together. 80% of families have £25k or less a year.
The graph [ ] shows, in increments of 10%, the household income of each decile group in the UK. It is based upon a modified version of the OECD equivalised scale. Crucially, it is not my data but the government's Office of National Statistics see here. The calculation factors in the number of dependents and the size of the household. Considering that rents are £8,600 & that dual energy bills are £1,400, one can quickly gain the impression that families are struggling worse than ever. With inflation running at 5% 23% Gas, 11% Housing, 8% transport, and wages growing at just 300 pennies a week over the year, life is now very unaffordable for millions.
This is a dismal fallacy, one that I shall attempt to get named 'Worstall's fallacy', in honour of the person who I first saw mention it (eg here).
He's looking at income before benefits, but then totting up all the things that people need to buy from their income after benefits. So he naturally will assume that we're a bunch of Tory baby-eating bastards, because he's deliberately ignored the welfare state, by which we help the very poorest in society. And that's a key mechanism by which the state alleviates the very problems he identifies.
Yet there's more. He has got his income from this table, which the eagle-eyed among you will note is a table of expenditures. He's taken the 'lower bound' information of each decile from the top of the table and multiplied by 52 to arrive at annual income figures. But that's not the average income for each decile. This explains why his graph shows that the poorest decile has income of £0, a clearly ludicrous position.
I appreciate that Eoin wants to show that the poor are poor. But abusing the data like this is hardly the way to do it.
[...] This is bad on public interest grounds. Firstly, measures of progressiveness are only as good as the experts who measure them. People tend to cherry pick the statistics that suit them best. So, if the measurement of poverty misses out something like, say, access to Council Housing (which richer folk can't get), it may understate the actual progressiveness of a suite of policies. Other benefits, such as free dental care or prescriptions are similarly overlooked. Even worse, someone about to retire has a massive asset in their state pension accrual. But, again, this isn't recognised as an asset, while any private saving held by the rich is. Readers may recognise this as a form of Worstall's fallacy. [...]