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Economic Data Blogs

Serious Errors on UK Telecoms Data: Prices could have fallen by 90% more than the official price index Serious Errors on UK Telecoms Data: Prices could have fallen by 90% more than the official price index
The Office of National Statistics (ONS), Britain’s official data agency, has admitted that it has made serious errors in its estimation of the output and productivity of the telecoms sector. A paper co-authored by Richard Heys, deputy chief economist of the ONS which compared approaches to deflating the output of the telecoms industry across countries found a “wider disconnect between the technological performance and economic measurement of the industry in the UK.”1 The authors reported that the deflator used in the UK telecoms sector was biased upwards.
Can Big Data Improve Economic Measurement? Can Big Data Improve Economic Measurement?
The amount of data generated and stored in the digital age is accelerating rapidly, but this is not reflected in official economic statistics. Half a decade ago one estimate put the daily global creation of data at around 2.5 exabytes [2.5×1018 bytes] and it was predicted last year that this would rise to 163 zettabytes of data by 2025 [1.63 x 1022 ]. To meet this demand global per-capita information storage capacity has doubled every 40 months since the 1980s.1 Unfortunately, in the face of this revolution the tortoise-like evolution of the methods used to generate official economic statistics means that measurements of real economic activity are becoming increasingly irrelevant.
Trade Data: Use with Care Trade Data: Use with Care
The international trade statistics used by many commentators are inaccurate and the way trade is measured is no longer fit for purpose. Not only do world exports and imports not balance, but large asymmetries are found in the balance of trade statistics between countries and regions. These errors do not cancel out on aggregation across countries.
Debt to GDP Ratio: Use with Care Debt to GDP Ratio: Use with Care
One of the most widely used and misused statistics is the ratio of public debt to national income as a measure of a country’s solvency. The debt-to-GDP ratio itself is measured with a country's gross sovereign debt in the numerator and Gross Domestic Product (GDP) in the denominator. A debt-to-GDP ratio of 1.0 (or 100%) means that a country's debt is equal to its gross domestic product. It is used extensively by credit rating agencies, but making sense of any particular ratio is difficult.
The Flaws in Population Data The Flaws in Population Data
Accurate world population data is immensely important in assessing the impact of people on the sustainability of the planet’s resources. According to World Economics there were an estimated 7.467 billion humans living on the planet in 2017. The Chart below shows that this number is expected to climb to reach 11.2 billion by 2100.
The UK Retail Price Index: Broken, Inaccurate and Unfair The UK Retail Price Index: Broken, Inaccurate and Unfair
Calculating price indexes that are theoretically sound, robust, comprehensive, easy to understand, and which reflect underlying reality is one of the hardest tasks in economics. Most measures of domestic inflation have flaws, but perhaps the least fit for purpose is the Retail Price Index (RPI) used in Britain. In official use since 1956 the RPI is calculated in a different way from the alternative Consumer Price Index (CPI) in use since 1996. RPI estimates of underlying inflation are generally at variance from CPI calculations, with the RPI recording annual prices increase at a rate around 0.9 percent higher than the CPI. Estimates for price changes also vary widely by goods category, especially for clothing.