8 ms·

Thomas Piketty Responds to Criticism of His Data

122 points by felix 12y ago

conistonwater 12y ago
Response in full (pdf): http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014TechnicalAppendixResponsetoFT.pdf http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014Tec...
- adwhit 12y ago
  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.
  - Malarkey73 12y ago
    And they only picked that method for recent years so inequality is declining in Britain? Through Thatcher and Blair years??? Right.
  - bjelkeman-again 12y ago
    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 12y ago
      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
  - hsksn78728 12y ago
    Is this a joke? The UK's own Office for National Statistics derived that 44% figure, not the FT. Shame on you.
    - gress 12y ago
      Shame on you for your appeal to authority. The question is do the statistics support Piketty's interpretation or not. Not who generated them.
      - hsksn78728 12y ago
        The FT is citing figures from the UK's official records. Shame on the FT for citing statistics that run counter to Piketty's own figures (which he asserted was 71%)? Wow.
      - agarcia-deniz 12y ago
        The point is that the FT switched from one type of data to another, as per usual truth is probably somewhere in the middle, which would probably still back up Mr Picketty's analysis. As many people have said, is the UK one of the most equal societies in the world? This seems very unlikely
  - svantana 12y ago
    Particularly the "12.5% for the top 1%" is ridiculous and obviously too low for any modern, capital-intensive, non-socialist society. The FT should know this from their Economics 101, but it seems their main objective here was to discredit Piketty...
jrochkind1 12y ago
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.
- ThomPete 12y ago
  I like to say that usefulness trumps truth.
  - rosser 12y ago
    Usefulness to whom, and in what context? In the case of the climate change "debate", which has significant parallels to this one, denial is useful to entrenched interests at the expense of everyone else — including, ultimately, those same interests. How "useful" is that, exactly?
    - ThomPete 12y ago
      Thats the point. There is no truth only useful perspectives.
- 001sky 12y ago
  And even then most people don't have a choice--they have to use what data they are "stuck with" and often times that data is provided by people with their own agenda. Public-disclosure requirements is highly politicised and fought-over by various well-financed special interests. And that is not even counting the lawyers, accountants, and advisors paid to dress things up even further after a law or rule is created.
Malarkey73 12y ago
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.
- bsaul 12y ago
  Yeap... They should've read his bio a little better. This guy's from the most hardcore math school of the country. Less than a few hundreds accepted every year for the whole country ( and only based on a contest in which most top science students participate), and he got inside 2 years younger than normal. He isn't the typical economist. Attacking him on raw data analysis was probably the most daring thing to do.
  - mpweiher 12y ago
    "Daring" in the British sense of the word: "That's a very brave proposal" -> "You're utterly mad".
- hsksn78728 12y ago
  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?
  - epistasis 12y ago
    For example, from the fine article: >He says the newspaper’s analysis rests on apples-to-oranges comparisons of past data from tax returns mixed with current data from surveys, which makes the conclusions they reach deeply flawed, and contrary to what a wide range of other studies have found.
    - hsksn78728 12y ago
      Please provide proof that FT's data is "shoddy." Piketty admitted that he made up figures because none were available for certain time periods. It's hilarious that the FT is being accused of "shoddy" data (no proof yet), when Piketty could be accused of doing the same (proof available from Piketty himself).
credo 12y ago
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.
- baddox 12y ago
  Climate change and macroeconomics are really similar in this regard. I think the main reason there is so much controversy is because the science is so entangled with the politics, and that probably applies to the experts just as much as it applies to the average onlooker.
  - pavlov 12y ago
    Climate research is nothing like economics. Politics is involved in how we should react to the scientific results, but that doesn't mean the science itself is "entangled" with politics. You might just as well suggest that paleontology is entangled with religion because its findings offend some people's religious views.
    - dllthomas 12y ago
      Ideologies climb.
    - baddox 12y ago
      > You might just as well suggest that paleontology is entangled with religion because its findings offend some people's religious views. I absolutely would say that.
001sky 12y ago
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.
- deleted 12y ago
  [deleted]

122 points by felix 12y ago

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

adwhit 12y ago
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.
- Malarkey73 12y ago
  And they only picked that method for recent years so inequality is declining in Britain? Through Thatcher and Blair years??? Right.
- bjelkeman-again 12y ago
  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 12y ago
    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
- hsksn78728 12y ago
  Is this a joke? The UK's own Office for National Statistics derived that 44% figure, not the FT. Shame on you.
  - gress 12y ago
    Shame on you for your appeal to authority. The question is do the statistics support Piketty's interpretation or not. Not who generated them.
    - hsksn78728 12y ago
      The FT is citing figures from the UK's official records. Shame on the FT for citing statistics that run counter to Piketty's own figures (which he asserted was 71%)? Wow.
    - agarcia-deniz 12y ago
      The point is that the FT switched from one type of data to another, as per usual truth is probably somewhere in the middle, which would probably still back up Mr Picketty's analysis. As many people have said, is the UK one of the most equal societies in the world? This seems very unlikely
- svantana 12y ago
  Particularly the "12.5% for the top 1%" is ridiculous and obviously too low for any modern, capital-intensive, non-socialist society. The FT should know this from their Economics 101, but it seems their main objective here was to discredit Piketty...

jrochkind1 12y ago

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.

ThomPete 12y ago
I like to say that usefulness trumps truth.
- rosser 12y ago
  Usefulness to whom, and in what context? In the case of the climate change "debate", which has significant parallels to this one, denial is useful to entrenched interests at the expense of everyone else — including, ultimately, those same interests. How "useful" is that, exactly?
  - ThomPete 12y ago
    Thats the point. There is no truth only useful perspectives.
001sky 12y ago
And even then most people don't have a choice--they have to use what data they are "stuck with" and often times that data is provided by people with their own agenda. Public-disclosure requirements is highly politicised and fought-over by various well-financed special interests. And that is not even counting the lawyers, accountants, and advisors paid to dress things up even further after a law or rule is created.

Malarkey73 12y ago

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.

bsaul 12y ago
Yeap... They should've read his bio a little better. This guy's from the most hardcore math school of the country. Less than a few hundreds accepted every year for the whole country ( and only based on a contest in which most top science students participate), and he got inside 2 years younger than normal. He isn't the typical economist. Attacking him on raw data analysis was probably the most daring thing to do.
- mpweiher 12y ago
  "Daring" in the British sense of the word: "That's a very brave proposal" -> "You're utterly mad".
hsksn78728 12y ago
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?
- epistasis 12y ago
  For example, from the fine article: >He says the newspaper’s analysis rests on apples-to-oranges comparisons of past data from tax returns mixed with current data from surveys, which makes the conclusions they reach deeply flawed, and contrary to what a wide range of other studies have found.
  - hsksn78728 12y ago
    Please provide proof that FT's data is "shoddy." Piketty admitted that he made up figures because none were available for certain time periods. It's hilarious that the FT is being accused of "shoddy" data (no proof yet), when Piketty could be accused of doing the same (proof available from Piketty himself).

credo 12y ago

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.

baddox 12y ago
Climate change and macroeconomics are really similar in this regard. I think the main reason there is so much controversy is because the science is so entangled with the politics, and that probably applies to the experts just as much as it applies to the average onlooker.
- pavlov 12y ago
  Climate research is nothing like economics. Politics is involved in how we should react to the scientific results, but that doesn't mean the science itself is "entangled" with politics. You might just as well suggest that paleontology is entangled with religion because its findings offend some people's religious views.
  - dllthomas 12y ago
    Ideologies climb.
  - baddox 12y ago
    > You might just as well suggest that paleontology is entangled with religion because its findings offend some people's religious views. I absolutely would say that.

001sky 12y ago

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.

deleted 12y ago
[deleted]