Thomas Piketty Responds to Criticism of His Data

Thomas Piketty Responds to Criticism of His Data(nytimes.com)

122 points by felix 11 years ago | 70 comments

jrochkind1 11 years ago |

In this age of metrics everywhere, evidence-based everything, big data...

I think what this story actually is, is a reminder that just because something is based on quantitative data, that doesn't make it 'objective' or automatically 'truth'.

Quantitative analysis rests on so many choices, as to how to measure, what measurements to use, what statistical formula to use, how to interpret what they say. Each of those choices can be mistaken -- _or_, even more troubling to the worldview that quantitative==objective truth, be subject to debate among reasonable and well-intentioned people about the best choices to make and the implications thereof.

I'm not saying it means there is no 'truth', and all research conclusions are equally valid. I'm saying that research conclusions based on quantitative data, no less than those based on qualitative information, are subject to debate and argument, not physical objective material reality simply because there were measurements and numbers involved.

jforman 11 years ago | |

An excellent book on this topic is "A Social History of Truth: Civility and Science in Seventeenth-Century England." It examines what "truth" means in a scientific context by going back to its roots as a discipline.

The tl;dr version is that knowledge (even "hard" scientific knowledge) cannot be meaningfully acquired by a single person independent of a community that makes common assumptions, since going to very first principles for even the simplest analysis is totally unwieldy. Take something like simple genetics — we rely on the testimony of a lot of people just to accept the utility of a basic Punnett square.

I much preferred Summer's assessment of Piketty to FT's: he was measured and responsible in his criticism, and correctly noted that it'll take years for serious academics to sift through the merit of the book. Alas, responsible discussion is hard to come by when it comes to data that challenges peoples' closely-held values.

conistonwater 11 years ago | |

In this age of metrics everywhere and big data, the data on inequality, a very important social issue, took Piketty and his collaborators, all professional economists, many years of research to assemble and publish.

This data is not even big: to paraphrase a joke I read on HN recently, you could do the analysis in Excel and it wouldn't even crash.

There is something to be said for systematically gathering a lot more data than governments collect now, especially income and wealth data in this case. Not because it benefits anyone economically right now, but because without collecting it now, it is that much harder to reconstruct it later.

endersshadow 11 years ago | | |

The primary issue here is how you can define "wealth" or "rich" and "poor." Income's one measure, sure. But what about the trust fund kids? What about college kids?

The real problem with collecting data like this is that there's no real good source of it. Most of what you get has selection bias, and the other stuff you can get is riddled with holes. And then you try to do it across countries, where definitions change and governments college disparate data at differing granularities and it just gets...frustrating.

An economist's toughest job is finding good data. The analysis is the easy part!

001sky 11 years ago | |

And even then most people don't have a choice--they have to use what data they are "stuck with" and often times that data is provided by people with their own agenda. Public-disclosure requirements is highly politicised and fought-over by various well-financed special interests. And that is not even counting the lawyers, accountants, and advisors paid to dress things up even further after a law or rule is created.

NorthGuy1 11 years ago | |

I'm interested to know where you think the debate should lie. Do you believe that it should be debated empirically among economic journals or in the court of public opinion? Because the book is a compilation of the former and we are only seeing doubt in the latter.

ThomPete 11 years ago | |

I like to say that usefulness trumps truth.

rosser 11 years ago | | |

Usefulness to whom, and in what context? In the case of the climate change "debate", which has significant parallels to this one, denial is useful to entrenched interests at the expense of everyone else — including, ultimately, those same interests. How "useful" is that, exactly?

credo 11 years ago |

Unfortunately, ultimately, the research, data and analysis isn't going to matter much.

Consider the debate on climate change, 98% of climate scientists agree that humans contribute significantly to climate change, but large numbers of Americans (including some of the most powerful politicians and talk-radio hosts) either deny climate change or claim that humans don't do much to cause climate change.

I expect the inequality debate to play out in a similar fashion. Many economists may agree with Piketty. However, the FT has thrown sufficient "doubt" on his findings (it doesn't matter that they compare past tax data with today's "survey" data etc).

This "doubt" provides sufficient ammunition for those who'd like to deny that inequality is on the increase. So the debate will end up as another one of those "he said, he said" topics in the media and people are likely to take sides based on which side of the ideological divide they are one.

conistonwater 11 years ago |

Response in full (pdf): http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014Tec...

adwhit 11 years ago | |

Quoting from the response:

a 44% wealth share for the top 10% (and a 12.5% wealth share for the top 1%, according to the FT) would mean that Britain is currently one the most egalitarian countries in history in terms of wealth distribution; in particular this would mean that Britain is a lot more equal that Sweden, and in fact a lot more equal than what Sweden as ever been (including in the 1980s). This does not look particularly plausible

Shame on the FT.

bjelkeman-again 11 years ago | | |

Having lived both in Sweden and in Britain you don't even need data to know this isn't very plausible. That said, Sweden is getting a bigger gap between the highest earners and the lowest at a fast rate. "the most equal country in the world is becoming less so." -The Economist http://www.economist.com/node/21564412

svantana 11 years ago | | |

Particularly the "12.5% for the top 1%" is ridiculous and obviously too low for any modern, capital-intensive, non-socialist society. The FT should know this from their Economics 101, but it seems their main objective here was to discredit Piketty...

Malarkey73 11 years ago | | |

And they only picked that method for recent years so inequality is declining in Britain? Through Thatcher and Blair years???

Right.

hsksn78728 11 years ago | | |

Is this a joke? The UK's own Office for National Statistics derived that 44% figure, not the FT.

Shame on you.

Malarkey73 11 years ago |

The FT is actually a pretty balanced high quality paper - but their alternative analysis of the Piketty data is shoddy.

I can't imagine any good comeback from them to Pikettys comeback.

001sky 11 years ago |

Most data is released to the public in ways to make the data as use-less as possible. This is particularly true with economic data and SEC financial information. So, none of this type of "noise" or its analogue "noise cancellation" should really be taken at face value. The threshold for even disclosure of such mistakes is typically based on "material adversity", and this is the type of standard which people should look to in this case. The question is simply does it move the needle? Its not clear from reading these multiple threads that it does.