Question

In the statistical traps and trickery section of the course we have covered multiple biases that can be observed both in data and in the graphical representation of data. Please find your own graph or piece of data. Briefly explain your data and discuss the statistical traps and trickery associated with what you have found. What does the data/graph tell you? What is left out? By piece of data I mean those things equivalent to GDP, unemployment, or income. If you wish to use one of those topics you may.

Please paste the graph and or data at the top of the page. Your response should be direct and ½ page single spaced with one inch margins.

Answer 1

The growth of an economy is measured by GDP of the economy. GDP is the Gross domestic product that consists of consumption, investment,government expenditure and net exports of the economy. Thus, in many researches GDP is taken as a proxy for growth of the economy. GDP is calculated at both current and constant prices. Mostly while calculating growth people consider GDP at current price but the correct statistical unit is at constant prices as it helps understand the actual increase in the GDP.

There are many advantages of taking GDP as a growth proxy, but there are many statistical bias that also exsist here. Some of these bias are:

• It does not consider quality of life or the developmental aspect of life.
• Does not cover inequality factor into consideration that plays a major role in today's economy
• The qualitative aspects of life like happiness are not considered in GDP caluclation.
• It also does not cover the various non economic transactions that happen in the economy like services provided by a mother, housewife etc.

Over here, consider the GDP annual growth data for India over the time range of 2000-2019. The data is taken from World Bank website and it represents the annual percentage of growth.

The graph above shows the GDP growth rate of India over the past 20 years. According, to the graph presentated above, it shows a very positive picture of the Indian economy showing that India is growing at good pace. However, it does not show the wideing of income inequality in the economy, poverty gap etc. Thus, these are the statistical bias that cannot be visible through this data.