Guest Editorial: Anecdotes, aberrations and averages

Context matters. Take this simple statement: Nearly 10 percent of the world’s people live in extreme poverty.

This is true. And standing alone, without context, this statement would lead many to think the world has a huge poverty problem. They'd be right. But they'd also be missing a big part of the story: Just twenty-five years ago nearly 30 percent of people lived in extreme poverty.

So the world’s extreme poverty problem is actually getting much better.

The prospects for the future would be very different if, instead of steadily improving, extreme poverty was stagnating at nearly 10 percent. Or, worse, if extreme poverty was steadily increasing. But there's no way of knowing which of these distinct scenarios is true from the statement alone.

You need context.

Terrorism is another good example of how context matters. The events of September 11, 2001 highlighted the great dangers of terrorism. But how does terrorism compare to other threats? While terrorists have killed about 3,000 Americans since 2000, over 20,000 Americans die by homicide or murder annually. And more than 38,000 die from traffic accidents each year.

Is terrorism, in context, as threatening as some think? Did it make sense for the federal government to create the mammoth Department of Homeland Security after 9-11 while underfunding pandemic preparedness the last two decades?

Hardly.

There are subtler examples, too. Many politicians love to brag about the stock market setting “records.” “The Dow Jones reached a new record on my watch” is a common boast from incumbents. But looking at the stock market in context shows—surprise, surprise—these statements are highly misleading. The stock market is a cumulative tally—it never resets to zero. It also always goes up over time because, on average, publicly traded companies get bigger as they mature. A new market high is a very different record from, say, baseball's single-season homerun record, which requires extraordinary performance. In stark contrast, the stock market can break records even while increasing at below-average rates.

People embrace facts out of context all the time. (And not just politicians.) They disregard trend lines. They ignore the net impact of something and focus on discrete effects. They gloss over comparables and instead focus on isolated samples. They confuse outliers and aberrations with the mean or the median. And many have trouble with scale, hardly distinguishing 100 million units of something from a billion units.

Anecdotal thinking is particularly widespread. People often tell stories that support their worldview without considering the big picture. Global warming deniers, for example, describe dramatic blizzards to show that the world is not warming. But to know whether there's global warming you need to know, well, whether the globe is warming—not how much snow there was in Green Bay last December 18. And the data clearly establish that Earth, on the whole, is getting hotter. In many cases, like global warming, context is not just important—it is a necessary precondition to understanding something at all.

In his new book Rationality Harvard professor Steven Pinker explores why humanity “appears to be losing its mind.” How can the same species "that developed vaccines for Covid-19 in less than a year,” Pinker wonders, “produce so much fake news, medical quackery, and conspiracy theorizing?”

We do indeed have a rationality problem. And one of the core reasons why is that people draw the wrong conclusions about what they see. Again and again. Taking the time to put things in context would help.

A lot.

William Cooper has written for The Wall Street Journal, New York Daily News and Huffington Post, among others.