August 17, 2016

Official statistics

There has been some controversy about changes to how unemployment is computed in the Household Labour Force Survey. As StatsNZ had explained, the changes would be back-dated to March 2007, to allow for comparisons.  However, from Stuff earlier this week:

In a media release Robertson, Labour’s finance spokesman, said National was “actively massaging official unemployment statistics” by changing the measure for joblessness to exclude those using websites, such as Seek or TradeMe.

Robertson was referring to the Household Labour Force Survey, due to be released on Wednesday, which he says would “almost certainly show a decrease in unemployment” as a result of the Government “manipulating official data to suit its own needs”.

Mr Robertson has since withdrawn this claim, and is now saying

“I accept the Chief Statistician’s assurances on the reason for the change in criteria but New Zealanders need to be aware that National Ministers have a track record of misusing and misrepresenting statistics.”

That’s a reasonable position — and some of the examples have appeared on StatsChat — but I don’t think the stories in the media have made it clear how serious the original accusation was (even if perhaps unintentionally).

Official statistics such as the unemployment estimates are politically sensitive, and it’s obvious why governments would want to change them. Argentina, famously, did this to their inflation estimates. As a result, no-one believed Argentinian economic data, which gets expensive when you’re trying to borrow money. For that reason, sensible countries structure their official statistics agencies to minimise political influence, and maximise independence.  New Zealand does have a first-world official statistics system — unlike many countries with similar economic resources — and it’s a valuable asset that can’t be taken for granted.

The system is set up so the Government shouldn’t have the ability to “actively massage” official unemployment statistics for minor political gain. If they did, well, ok, it was hyperbole when I said on Twitter ‘we’d need to go through StatsNZ with fire and the sword’, but the Government Statistician wouldn’t be the only one who’d need replacing.

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Thomas Lumley (@tslumley) is Professor of Biostatistics at the University of Auckland. His research interests include semiparametric models, survey sampling, statistical computing, foundations of statistics, and whatever methodological problems his medical collaborators come up with. He also blogs at Biased and Inefficient See all posts by Thomas Lumley »

Comments

  • avatar
    steve curtis

    Would the way the numbers have been changed be done if it showed unemployment had risen?
    We can see how NZ police who collect their own numbers and indeed employ a National statistics Manager, who solely rely on data from Police themselves, have debased the integrity of Crime statistics. From memory that might have been a Statistics department function previously. nek minnite its not.

    1 year ago

    • avatar
      Thomas Lumley

      Everyone now concedes this was an independent decision by StatsNZ — and the point of having them to make independent decision is so that sort of question doesn’t have to arise.

      I haven’t met the Government Statistician, Liz MacPherson, but people I know who have met her say she has the right attitude for the position. In the absence of anything that looks remotely like evidence to the contrary I’m happy to assume that the politicians didn’t ask for the change and that they would have been told politely to fuck off if they had.

      Here’s an example from the US where someone made the allegation of fudging the unemployment numbers seriously, not just as political posturing, and the follow-up.

      1 year ago

      • avatar
        steve curtis

        But is she actually a bona fide statistician or just another talented manager on the public service merry- go-round ?
        “Before joining Statistics NZ, Liz held several senior roles over a 20-year period at the Department of Labour, the Ministry of Economic Development (MED), and more recently the Ministry of Business, Innovation and Employment (MBIE).”

        ” Liz led three branches, covering various policy and regulatory areas including tourism, consumer affairs, major events, regulatory policy, small- and medium-sized enterprises, environmental regulation, and energy safety.”

        Unfortunately its the way things are done these days generalists trump specialists everytime and they are looking for the next promotion where they will be judged on their past performance.

        1 year ago

  • avatar
    Gr Ster

    I have a concern with the institutional arrangements for Stats. It is a government department; meaning that there is a degree to which it should follow the decisions of the Govt of the day (although the Statistics Act prevents that). It introduces the possibility of influence. Stats really should be an independent Crown entity.

    This is one of those ‘these are old institutional arrangements that no one has yet corrupted so why bother changing’ situations. NZ has too many of them (like not having a formalised written constitution).

    1 year ago

  • avatar
    steve curtis

    Just reading the link to the independence of the Government statistician, which firstly says they are the sole decision maker and then qualifies it by saying they are subject to the direction by the Minister ???
    The only proviso is that the GS ‘may’ make such a direction public.
    So its ‘shall’ follow direction of Minister but only ‘may’ make that direction public. Those who are wise to the ways of pushy ministers and career public servants can see its a limited independence.

    1 year ago

  • avatar
    Thomas Lumley

    I think StatsNZ is pretty good, but you’re missing my point. I’m not arguing that StatsNZ are beyond criticism. I’m saying that if the government routinely alters the unemployment statistics this would be a Really Big Deal, and accusations of it should provide evidence and be followed up by serious investigations. It shouldn’t just be routine political invective

    1 year ago

    • avatar
      steve curtis

      Yes. In the unemployment stats the government isnt telling them what to do. However it seems to be the usual reason, every one else is doing it. Well a only few are but Eurostats arent.
      Recently the Minister of Finance claimed that Statistics NZ measure of Inequality was ‘ statistically invalid’ but when pushed has since said he was wrong. Politicians really dont like it when the numbers arent what they like, so maybe its time to make SNZ truly independent rather than the half hearted mesure they have now.

      1 year ago

  • avatar
    Megan Pledger

    But there is another issue about the meaningfullness of autumn quarter unemployment stats (and spring quarter stats). They are highly dependent on the weather.

    If we have a good autumn quarter, as we had, then there is a lot of outside work that gets carried on from summer. That tends to suck up unskilled labour. And lots of people keep go out in the evenings boosting the hospitality sector.

    People like farmers, wait for a good weather year to get around to all those outside jobs that can slide until the weather is right. And it would have double-downed this year as the cows would have been dried off earlier due to the current economics of milk production.

    The government might like to say that unemployment is down because of their actions … but that happens every spring and autumn quarter when the weather is unusually fine and calm.

    Perhaps there is an honours paper in looking at the association of sunshine hours with unemployment statistics.

    1 year ago