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The Economist: The world of alternative facts

Chaos and bad behavior ensue


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Clearly, the debate over fake news and alternative facts is not new. More than a century ago, Mark Twain famously said, “There are three types of lies:

"lies
damn lies
and statistics.”

It’s good to remember this as we sink to accepting only facts and information that support our own view. The world of social media, where news can be contrived and published for mass consumption without any basis in reality, adds new fuel to the age-old fire. Unfortunately, this seems to incite chaos and promotes our worst behavior. 

Applied economists help governments, nonprofits and businesses compile and analyze data to support their decision-making. Our engagements are diverse – proposed legislation, industry impacts, urban development, new product lines and process re-engineering, to name a few. It’s an interesting and growing field, but not always fun.

I have lost friends and clients over the years because my research did not support their position, and I resisted revising my conclusion. Perhaps I took the quote from John 8:32 too literally when I read it etched in stone above Palmer Hall, the social sciences building on the Colorado College campus: “Ye shall seek the truth and the truth shall set you free.”  Over the years, I have come to realize we never really know the truth, but it’s the seeking of truth with a sense of integrity that makes us free – even when the search creates personal turmoil. 

The outright dismissal of facts and data by a growing number of people is disconcerting. It’s one thing to dispute facts, and it’s totally appropriate to challenge conclusions made from factual data, especially if the data is derived from modeling. But to routinely dismiss arguments as “alternative facts" or "phony science” is disingenuous and indicative of a weak counterargument or laziness.

Accusations of partisanship can be equally dismissive, especially when the advisers have a long history of nonpartisan credibility. Groups like the Congressional Budget Office and the Colorado Legislative Council provide a great service to our legislators as well as the public.

Using emotional, non-factual arguments is perfectly fine and often prevails over facts. Aristotle’s modes of persuasion included ethos, pathos and logos. My profession is all about establishing credibility or ethos while putting forth analysis to derive logical insight (logos) for decision-making.

Our clients must bring the emotional or pathos chord to the table. According to Aristotle, arguments with all three components are more influential.  Of course, this assumes the decision-makers are not already staunchly loyal to a single position, in which case they are not really hearing any arguments.

How does one sense bias and question data? If the analyst represents one party, they are certainly prone to bias, but that alone does not qualify. If they always reach a similar conclusion, like “regulation is good,” then they have demonstrated a pattern bias. Bias can also be uncovered in a payment arrangement.

If compensation to the analyst is predicated on a specific outcome, then there is clear bias equating to a sales pitch. Guaranteed compensation regardless of findings is fundamental to less biased analysis. We often require 50 percent of our fee upfront before any conclusions are drawn. This enables clients to reject the conclusion without imposing undue influence to change it. Another bias protection strategy involves peer review. Was the analyst’s approach reasonable and consistent over time? Third-party reviews are common with many projects.

Challenging the data, analysis and conclusions of scientists is appropriate. Good researchers welcome these challenges. This is especially true for applied economists and other social scientists who typically acknowledge an element of “art” in their practice. The best practitioners strive for the same conclusions regardless of who is asking or the client’s agenda. 

As consumers of data and other information, we should not simply reject or accept statistics because of our own preconceived notions. Checking the potential bias of the source is critical, and reviewing conflicting information is appropriate. This is especially important when crafting policy or strategy. Personal and professional growth comes from challenging ourselves and being willing to change our perspective or decision based upon new information.

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Tom Binnings

Tom Binnings is a senior partner at Summit Economics in Colorado Springs. He has more than 30 years of experience in project management, economic and market research, real estate development, business analytics and strategic planning. He can be reached at (719) 471-0000 or tbinnings@comcast.net.

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