Numbers can lie

Smart statisticians, economists, CEOs can play with numbers to make them look good.

That is why companies play with their ROI models changing them whenever they feel they should. That is why executives spend a great deal of time choosing their words in the opening statements of the annual reports.

I got the idea for this post when I was reading InBusiness the other day and there was a section saying that the average monthly salary for men in Cyprus is €1,833 and for women about €1,580. I have always claimed that the “average” is not always the best type of measurement and in my humble opinion it is very wrong to use this for the average wage.

Let me explain myself:

In recording all wages, there are many outliers. Probably an average job in Cyprus would pay between €1100 to €2000. But there are many people who earn much more than that. Those outliers are always on the top side and not the bottom. We cannot have outliers on the bottom because according to regulations there is a minimum wage that needs to be paid. So for every person in the population the lowest wage you can find equals the minimum wage. On the other hand, there can be many outliers on the top side. There are people who earn € 5,000 a month, there are people who earn €10,000 and there are people who earn €30,000 a month. These figures unavoidably inflate the average salary giving a misrepresentation. All things considered I believe that the use of the median would probably be much more representative in cases of salaries.

Thinking about numbers, I also remembered an article I read about Lawrence Summers, ex-President of Harvard. If you ask pretty much anyone they would tell you that Mr. Summers claimed in a business lunch that “men are smarter than women”. What he actually said is that “there is greater variance in the intelligence of men than women”. Of course Mr. Summers is not stupid, he is actually very smart and he made his comment after years of research. Greater variance means that the tails of a normal curve of the IQ of men are a bit larger than the respective ones of the women. There might be more men than women who demonstrate a higher than normal IQ , but there are also more men than women who demonstrate lower than normal IQ.

Cyprus driving age

I was reading Politis newspaper online today, when my eyes fell on this new prospective law that was discussed in the Cyprus Parliament.  Two members of the Parliament proposed that we change the legal driving age in Cyprus from 18 to 17. Of course, that extra year, from 17 to 18 the acquirer of the new driving license would have to drive with an adult in the car. Their reasoning was that countries like the U.S, UK, Norway, Sweden and France have this law and they have fewer accidents per capita than Cyprus.

And here come my objections/ questions:

It is very naïve and very wrong to compare Cyprus with the U.S, the U.K, Norway and France. One cannot compare only one variable (in this case driving age) to examine the relationship with another variable (accidents per capita). There are a number of factors that play a major role in the number of accidents in a country.

Firstly, there is a major difference in terms of road infrastructure. Cyprus does not have the road infrastructure that U.S and U.K have. Thinking of accidents in Cyprus, a majority of them happen in streets that connect villages. These are usually roads without signs, and with very dangerous turns, and very narrow streets.

A second objection is the fact that the new drivers will have to drive with an adult in the car for the first year. As much as I would like to believe it, I can only see this happening for about a week if not less. Call it Cypriot attitude, call it Cypriot culture, call it whatever you want, I think that after the first week most parents would be very busy to ride in the car with their son/ daughter.

A third objection is the process of acquiring a drivers license in Cyprus. OK, the truth is that I have no proof, but I have heard of a lot of people that who have gotten their drivers license in an envelope. Why would we want to put more dangerous, inexperienced, immature drivers in the streets?

Fourth, why would we want to put more cars in the street? I can’t really project how much of a problem that would be (probably minimal) but in an already overcrowded with cars country, why do we want more people driving? The effort should be to push more people to ride the buses (that currently do not exist).

Fifth, there is another issue with the attitude towards Cyprus policing. Despite any laws and the consequences, Cypriots have a tendency to not see police as a strict regulatory body and will not care much of breaking any laws (e.g 17 year olds driving on their own).

Last but not least, 40% of the accidents happen in the age 15-24. If we pass this law are we really ready to put in practice what we say? Do we have the regulations, can the parents adopt their responsibilities, can the police control the 17 year olds? Will that extra year give them the required experience to decrease the number of accidents? Or will the extra year increase the number of accidents?

You can’t really build a beautiful house by start painting it first. You have to put the bricks and the cement, and the roof and then maybe you should start thinking of the color.