
Thomas Piketty Responds to Criticism of His Data - felix
http://www.nytimes.com/2014/05/30/upshot/thomas-piketty-responds-to-criticism-of-his-data.html
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jrochkind1
In this age of metrics everywhere, evidence-based everything, big data...

I think what this story actually is, is a reminder that just because something
is based on quantitative data, that doesn't make it 'objective' or
automatically 'truth'.

Quantitative analysis rests on so many choices, as to how to measure, what
measurements to use, what statistical formula to use, how to interpret what
they say. Each of those choices can be mistaken -- _or_, even more troubling
to the worldview that quantitative==objective truth, be subject to debate
among reasonable and well-intentioned people about the best choices to make
and the implications thereof.

I'm not saying it means there is no 'truth', and all research conclusions are
equally valid. I'm saying that research conclusions based on quantitative
data, no less than those based on qualitative information, are subject to
debate and argument, not physical objective material reality simply because
there were measurements and numbers involved.

~~~
conistonwater
In this age of metrics everywhere and big data, the data on inequality, a very
important social issue, took Piketty and his collaborators, all professional
economists, many years of research to assemble and publish.

This data is not even big: to paraphrase a joke I read on HN recently, you
could do the analysis in Excel and it wouldn't even crash.

There is something to be said for systematically gathering a lot more data
than governments collect now, especially income and wealth data in this case.
Not because it benefits anyone economically right now, but because without
collecting it now, it is that much harder to reconstruct it later.

~~~
endersshadow
The primary issue here is how you can define "wealth" or "rich" and "poor."
Income's one measure, sure. But what about the trust fund kids? What about
college kids?

The real problem with collecting data like this is that there's no real good
source of it. Most of what you get has selection bias, and the other stuff you
can get is riddled with holes. And then you try to do it across countries,
where definitions change and governments college disparate data at differing
granularities and it just gets...frustrating.

An economist's toughest job is finding good data. The analysis is the easy
part!

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credo
Unfortunately, ultimately, the research, data and analysis isn't going to
matter much.

Consider the debate on climate change, 98% of climate scientists agree that
humans contribute significantly to climate change, but large numbers of
Americans (including some of the most powerful politicians and talk-radio
hosts) either deny climate change or claim that humans don't do much to cause
climate change.

I expect the inequality debate to play out in a similar fashion. Many
economists may agree with Piketty. However, the FT has thrown sufficient
"doubt" on his findings (it doesn't matter that they compare past tax data
with today's "survey" data etc).

This "doubt" provides sufficient ammunition for those who'd like to deny that
inequality is on the increase. So the debate will end up as another one of
those "he said, he said" topics in the media and people are likely to take
sides based on which side of the ideological divide they are one.

~~~
jstalin
I'm surprised anyone is still repeating that 98% consensus hoax.
[http://richardtol.blogspot.com/2013/08/open-letter-to-
vice-c...](http://richardtol.blogspot.com/2013/08/open-letter-to-vice-
chancellor-of.html)

~~~
epistasis
I'm sorry, are you seriously saying that this paper was a hoax and the data
was manufactured, based on a ranty blog post?

That's ridiculous, and just proves the point of the comment you were replying
to.

~~~
pdeuchler
Dr. Tol was appointed to both the Copenhagen Consensus and the IPCC, is an
accomplished and respected economist, and very often is a voice of reason for
both sides of the debate.

I hope you can appreciate the meta-irony of declaring a blog post "ranty" to
invalidate its findings and then going on to accuse the parent of proving a
point about partisan ideology.

~~~
epistasis
First, the blog post does not rise to calling the initial survey a hoax. So
that addition of jstalin's, is well, completely ridiculous and inappropriate.

Second, the blog post _is_ ranty (and many if not most scientists are ranty,
in case you hadn't noticed). The associated comment manuscript isn't evidence
of a hoax. I'm not surprised it wasn't accepted anywhere. There's no meta-
irony in pointing that out.

~~~
om2
The post seems like strong evidence that the finding of the paper is wrong, or
at least not justified by the study performed. "Hoax" taken literally would
imply deliberate malfeasance, and that doesn't seem to be proven

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conistonwater
Response in full (pdf):
[http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014Tec...](http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014TechnicalAppendixResponsetoFT.pdf)

~~~
adwhit
Quoting from the response:

 _a 44% wealth share for the top 10% (and a 12.5% wealth share for the top 1%,
according to the FT) would mean that Britain is currently one the most
egalitarian countries in history in terms of wealth distribution; in
particular this would mean that Britain is a lot more equal that Sweden, and
in fact a lot more equal than what Sweden as ever been (including in the
1980s). This does not look particularly plausible_

Shame on the FT.

~~~
bjelkeman-again
Having lived both in Sweden and in Britain you don't even need data to know
this isn't very plausible. That said, Sweden is getting a bigger gap between
the highest earners and the lowest at a fast rate. "the most equal country in
the world is becoming less so." -The Economist
[http://www.economist.com/node/21564412](http://www.economist.com/node/21564412)

~~~
bobcostas55
You're confusing stocks with flows. Wealth inequality and income inequality
are completely different things, and Sweden being more unequal than the UK
does not seem at all implausible. Here's one paper from a few years ago
showing exactly that result:
[http://darp.lse.ac.uk/papersdb/Cowell_(Hills_Wealth_UK).pdf](http://darp.lse.ac.uk/papersdb/Cowell_\(Hills_Wealth_UK\).pdf)

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Malarkey73
The FT is actually a pretty balanced high quality paper - but their
alternative analysis of the Piketty data is shoddy.

I can't imagine any good comeback from them to Pikettys comeback.

~~~
hsksn78728
Burden of proof is on you to prove that FT's data is shoddy since you made
that claim. What specifically are you referring to and what sources are you
citing?

~~~
Malarkey73
There is a 10 page rebuttal .. but if you insist I précis the killer points
for you then:

The first of two substantive changes the FT notes that greatly changes
Pikettys European wealth trend would be the wealth estimate for Britain.

The FT choose a Fig of 44% they have got from a wealth survey carried out by
the ONS (Britains govt statistical office) - compared to Pikettys 71%.

The 71% is from estate tax data from Britains tax authorities (HMRC) and is
the same method used for the whole time-series.

The FT take that historical time-series then drop the 44% ONS figure in for
the most recent time points.

So according to FT methods - Britain unlike the US and the rest of Europe has
had declining inequality throughout its period of Thatcherite financial
deregulation.

This is just stupid.

The second substantive difference the FT note is that Piketty should weight
the 4 European series Britain, Sweden, France, Germany by the size of their
economies rather than a straight average.

He could but it only makes difference to the overall European trend if you
accept their crazy estimate of declining British inequality. Otherwise Briatin
is similar to the other 3 and it make no difference.

Thats about the main points.

~~~
econghiy
Piketty used data that was "unreliable"

[https://www.gov.uk/government/uploads/system/uploads/attachm...](https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/255772/personal-
wealth.pdf)

The ONS was used as a result. Piketty relied on similar self-reported surveys
for his US data.

~~~
simonster
Perhaps you would care to point to the part of the PDF that indicates the data
are unreliable, and to comment on the plausibility argument, i.e. that the
FT's analysis indicates that "Britain is currently one the most egalitarian
countries in history in terms of wealth distribution" and in particular that
it is far more equal than Sweden is or has ever been?

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001sky
Most data is released to the public in ways to make the data as use-less as
possible. This is particularly true with economic data and SEC financial
information. So, none of this type of "noise" or its analogue "noise
cancellation" should really be taken at face value. The threshold for even
disclosure of such mistakes is typically based on "material adversity", and
this is the type of standard which people should look to in this case. The
question is simply does it move the needle? Its not clear from reading these
multiple threads that it does.

