Matt T

Today's Observer has a great example of how innumerate journalists are. Most journalists would die if they made a grammatical error, but numeracy errors abound. The Observer's So Now You Know column, a selection of interesting statistics, quotes the New Yorker as saying the decline in the US stock market has cost the average US household $700,000.

Think about this. It can't be true. There are nearly 300m Americans, so let's say there are 100m American households. That would mean at $700,000 each, the stock market has lost $70 trillion. US GDP is about $10trillion, so they're arguing the stock market has lost seven times the amount of total GDP. Or think of it this way -- if the stock market has halved (it probably hasn't, but run with it) its peak value was $140 trillion.

I think maybe they mean $70,000 per household. But what I mean is even if you have no idea about the value of US stocks or how much they fall or how many households, surely one can think and then query whether the average US household has (or had) over a $1m of shares.

posted by Matthew @ 8/04/2002 02:23:00 PM Comments: 0