Good transparent data and statistics is essential for a Democracy

By Naragan 

In The Sun newspaper of the 23rd of January 2009, Khir Toyo quotes statistics about incomes and let me quote The Sun paper "… Currently the income gap is big as Malays have an average income of RM2,800, Indians RM3,200 and Chinese RM4,400, he said and this is why a new economic policy needs to be drawn up."

He is using the average statistics figure. If you take away the Anandakrishnans and the Tony Fernandez’s and the handful of Lawyers, Doctors and the few successful Businessmen, the average will sink to I do not where. The income gap between the Indians who earn a few hundred ringgit and those that earn a few hundred thousand to a few million monthly is just too big to warrant the use of the average statistic to describe the income levels of Indians.

Consider two rooms, 5 persons in one room and 10 in the other. In the first room the incomes of the people are RM500, RM500, RM600, RM700 and RM20,000 (yes RM20,000, not a typo error); in the second room the incomes are RM1500, RM1500, RM1500, RM1500, RM1600, RM1600, RM1800, RM1800, RM10,000, RM10,000. When the average income of the people in each room is worked out, you get an average of RM 4460 in the first room and an average of RM 3280 in the second room. This suggests that, generally speaking, the incomes of the people in the second room are lower than the incomes of the people in the first room. But look at the numbers again.

The truth is that the person with the lowest income in the second room has higher income (1500) than 4 out of 5 (RM500, RM500, RM600, RM700) in the first group. So, in reality which room has the higher income? Why does the average then tell a different story? What is the problem?

Well, let me tell you what is wrong. Whenever you have a large range in the data, that is a large distance between the lowest value and the highest (as in the case of the first room, lowest being RM500 and the highest being RM20,000) then the extreme data points affects the central tendency of that data set – the average number is skewed and it no more accurately represents the true situation. The average number is rendered a useless statistic to describe the reality of incomes in that group. You get a distorted representation of reality. This distortion leads to wrong or false conclusions and to wrong actions 🙁

In cases such as this, the right statistic to use is the median, which is the  the income of the person in the middle of the group when you arrange the incomes from lowest to highest in an ascending order. If the median is used in the above example then the median income in the first room becomes RM600 and the median income in the second room becomes RM1600. Look at the numbers again. Now this becomes more reflective of reality. Any conclusion we come to now about the comparative positions will be closer to the truth. That is why in most objective discussions of income throughout the world, the median is used as the statistic to describe incomes of groups of people. That is everwhere else except Malaysia.

Even a Form Six student who has done a course in basic statistics will know this. Isn't it surprising that the department that handles all statistics in our country does not know this – that they are unable to provide or advise the UMNO politicians to use the right statistics. Or is it, that this is being done wilfully to mislead? I am of the opinion, the latter is the case, because this is too basic in theory not to be understood by our erstwhile statisticians in the national statistics department. If they do not understand this, God save all of us.

In The Sun newspaper of the 23rd of January 2009, Khir Toyo quotes statistics about incomes and let me quote The Sun paper "… Currently the income gap is big as Malays have an average income of RM2,800, Indians RM3,200 and Chinese RM4,400, he said and this is why a new economic policy needs to be drawn up." He is using the average statistics figure. If you take away the Anandakrishnans and the Tony Fernandez’s and the handful of Lawyers, Doctors and the few successful Businessmen, the average will sink to I do not where. The income gap between the Indians who earn a few hundred ringgit and those that earn a few hundred thousand to a few million monthly is just too big to warrant the use of the average statistic to describe the income levels of Indians.

This is the basis of the lie that UMNO has been perpetuating about incomes which justify their ongoing deprivation and marginalisation of the Indian poor with policies like the NEP. Now using the same tactic, is Khir Toyo suggesting that another NEP type policy be instituted to correct the imbalance as portrayed by his statistics?

I think it is time some professionalism came into our Government Administrative Services and they must stop supporting all these lies. The statistics department and the Secretary Generals of the various ministries should stop using and /or providing these misleading statistics to politicians to slant policy. Earn your salaries, statisticians and secretary generals.

Accurate and transparent data and statistics is essential for a democracy. Only then people and politicians can be held to account. It will not be so easy for vested interests to usurp the power. Politicians will always be politicians, it is the system that has to keep them in check. This is definitely one of these thigns in our system which must be corrected when the time comes, and I see that it is not too far off.

What a lot of treachery has gone on. All this must stop soon if we, the people are not going to lose out further, in the next 50 years.