NIS Again: SA’s Interconnector

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I coined the phrase ‘Numeric Incompetence Syndrome’ a while back, and yesterday an article in my local newspaper delivered another glaring example. In summary…

South Australia’s connection to the national electrical grid is to be enhanced with a new 900km interconnector to New South Wales and Victoria. The capital cost is expected to be $1.53 billion. The article states: “To cover that, households would pay $9 a year in SA and $5 in NSW.”

Assuming an average household size of 2.7 persons (as in 2016 nationally), there are about 0.65 million households in SA and 3.11 million in NSW. So the total annual amount recovered from households would be ($9 x 0.65M) + ($5 x 3.11M) = $21.4 million. Even allowing for future population growth, this comes nowhere near “covering” an investment of $1.53 billion: to amortise such a sum over a 20-year life at a discount rate of 5%pa would cost $123 million per year, before considering any maintenance costs. So that’s error No.1.

The article goes on to say, “[ElectraNet] estimates the project would deliver overall benefits of $924 million over 20 years…” but adds that “the Australian Energy Regulator … has downsized the project’s 20-year benefit to $269 million.”

Who, in their right mind, would invest $1.53 billion in something that will deliver benefits of only $924 million over 20 years?! How can any sub-editor not see that this cannot be true?! Perhaps the word “net” was omitted, but surely “overall” was inserted to make clear that the writer means gross benefits.

My stroppiness is going off the scale. Journalism is not just about regurgitating people’s press releases; it has to involve some critical thought, some fact-checking, some exercise of common sense for heaven’s sake!

I have emailed the Editor of the newspaper with a link to this post and an invitation to respond and/or to publish a correction.

Surprising Numbers

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I’ve always been fascinated by results of calculations that seem disproportionate to the point of incredibility, but are correct. I get stroppy with people who are neither fascinated by such results nor moved to question and check them. Here are four that came to my attention recently:

  • I peeled an orange and weighed the peel. It was 31% of the unpeeled fruit, so a price of $2.99/kg turns out to be $4.33/kg of the edible part.
  • I read an article whose author decried the terrible devaluation of the US dollar over the past century: “A dollar in 1919 is now worth 5 cents!” That implies an average rate of inflation of 3.04%pa. A lot of central bankers would be very happy with that.
  • Imagine a globe with a diameter of 30cm (1 foot in the old money) representing Planet Earth. The depth of the atmosphere would be 0.3mm – the thickness of a child’s finger nail.
  • Research in the USA in 1997 found that average IQ had increased by 20 points since 1932. Eleven years later, similar research in the UK found a 14 point improvement since 1947. This is called the Flynn Effect. Other research suggests a pretty steady increase of about 3 points per decade – but only up to the late 1990s, when the trend appears to have petered out and reversed.
    [When originally posted, on 19 January, I mistyped “1970s” instead of “1990s”. Sorry.]

Suicide

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There’s been another report on suicide in Australia. People have expressed shock that the highest suicide rate is for men over 85 years of age. I say to those people, “Well, which group defined by gender and age do you want to have the highest suicide rate? Young men? Old women? Children?!”

Personally I think it makes perfect sense that old men are the most prone to suicide. Men are valued – by themselves and by others – for their strength, virility and self-reliance. They tend to define themselves in terms of their income-earning capacity. As they age, all these reasons to be valued fade away.

Men are also known to have fewer and weaker social connections outside their workplaces, and to recover more slowly than women after the loss of a spouse.

According to the latest Australian death statistics, with a bit of adjustment by me for population growth, 70% of males make it to 70; once there, half will make it to 90. I am not shocked if a few blokes in that bracket are no longer enjoying the party and want to leave early.

Numeric Incompetence Syndrome (NIS)

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Here is a direct quotation from my local newspaper:

“Aboriginal women are at least 32 times more likely to be hospitalised because of an assault by their partner than non-indigenous women.

“They are at least three times as likely to have experienced violence in the past year than non-indigenous women.

“All this despite comprising a far smaller proportion of the population.”

The writer (Lauren Novak) is drawing attention to important statistics and goes on to suggest ameliorative measures. But she spoils it for me in that third paragraph. Having correctly compared rates of hospitalisation and exposure to violence, she then demonstrates a failure to understand what a rate is.

I don’t want to pick on Ms Novak, who is a much-awarded professional journalist whom I have never met. This is just one example of what I have now dubbed Numeric Incompetence Syndrome (NIS). It seems to afflict journalists and sub-editors disproportionately, but perhaps that’s because their condition is on public display more often than other sufferers’.

I’m thinking about an annual award for the most egregious manifestation of NIS: a Nissy to sit alongside the well-established and eagerly-awaited Stroppy**. What do you think?

Since writing this I have seen another howler in my local newspaper (one of Rupert Murdoch’s, by the way): a little matter of a displaced decimal point in a graphic summary of the South Australian State Budget, showing annual revenue and expenditure to be A$1.9 billion instead of A$19 billion. Now that’s the sort of thing a sub-editor should pick up, don’t you think?

** The Stroppy Git Award for Meaningless Twaddle, awarded every January, for which nominations are always open.

Motherly Love

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I’ve just read an astonishing piece of news. According to my local newspaper, “New research shows that 77% of Australian mums are putting their own desires on hold to chase those of their children.” This bizarre finding arises from exhaustive analysis by PureProfile, paid for by Go People.

One hopes that Go People will follow this up by funding another round of ground-breaking research into dads’ suppression of their desires for the sake of their children.

Then, if they have any money left, they could hire someone to work out why this might be so. For example – and I’m thinking aloud here, having no research funding to do a proper job – could it be that without the instinct to devote oneself to providing and caring for one’s children none of us would be here?

Interest Rates

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Monetarism was in the early stages of its ascendancy when I was studying economics. I remember one of my lecturers describing Milton Friedman, doyen of the Chicago School, as “that amiable fascist.” Now we are living with the fall-out of Governments’ delegating economic management to their central banks and using fiscal policy as a means of appeasing noisy interest groups and winning elections.

I came across this graph yesterday and felt I should share it:

ustreasury10yieldgraph

If this is how interest rates have to behave – even dipping into negative territory currently in Denmark, Japan, Sweden and Switzerland – to balance inflation and economic growth, we should all be on the lookout for flying pigs and white rabbits with pocket watches.

Suicide

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People in rich and peaceful countries don’t have enough to worry about, so they look around for irritations and talk them up into Big Issues. This is happening now in Australia with male suicides.

Now, please don’t misunderstand me. I know there are people who kill themselves during fits if depression or in response to tragic events, from which they could have recovered to lead happy lives, and I wish they’d had second thoughts. But there are also people who rationally consider their prospects and their options and decide that they’d rather be somewhere else. They’re not enjoying the party so they want to leave. For those people, suicide is rational and even admirable. Their leaving the party means that the net sum of happiness in the world is increased.

But what makes me stroppy is that the people who are promoting this as a Big Issue in Australia speak as though suicide among Australian men has suddenly become a crisis that has to be moved up the political agenda. Notice my italics. The implication is that Australia is the suicide capital of the world and men are disproportionately affected.

Now consider the following facts, drawn from Wikipedia with a WHO citation and with age standardisation:

  • In a ranking of 171 countries, Guyana is ranked No.1 with 44.2 suicides per 100,000 people in 2012. Australia is at No.63 with 10.6.
  • In every country except two (Pakistan and Iraq) the male suicide rate exceeds the female, typically by a factor of about 3.
  • If we compare Australia with the other countries of the developed Anglosphere (our usual benchmark) it falls pretty much in the middle – see the extracted table below, which includes countries that are tied with those of the Anglosphere for a bit of extra colour.
  • The 17 countries at the bottom of the ranking – ie with the lowest suicide rates – are all located in or around the Caribbean Sea or have predominantly Muslim populations. This has nothing to do with the main theme of my post, but I think it’s a fascinating fact and someone should be doing a PhD thesis on it.

suicidestats

Where it says ‘more info’ you can click and see more if you go to the referenced Wikipedia page.

So how the hell did the UK manage to tie with Swaziland at No.105?! Perhaps most of the unhappy Poms have emigrated.