Friday, June 17, 2005

July 2003

Don’t try to exact too much out of numbers

By Matt Baron

We live in a world that offers precision—or at least the illusion of it. Odometers tell us the distance we’ve driven, to the tenth of a mile. Digital watches tell us it’s 4:43, not “about a quarter to five.”

But what about the horseshoes-and-hand grenades approach? You know, those cases in which close enough is, well, close enough. This issue comes up with using numbers in stories. How precise do we need to be? How precise do we want to be?

These questions stem from a recent panel discussion of which I was a part. The topic was accuracy in reporting and a fellow journalist raised the issue of how far to go with reporting dollar figures. If a budget is, say, $92.3 million, then we should not round it off to $92 million, he said. In his view, doing so means we’ve failed to account for $300,000 and essentially allowed an inaccuracy to creep into our story.

I understood his point, but I thought he was overly concerned. I shared this analogy: If my wife went shopping and spent $92.30 (a figure we all can relate to, and is within my wife’s budget, I might add), I wouldn’t feel misled if she told me she spent $92. The proportional difference in both scenarios is the same—a little more than 0.3%.

Moreover, a budget is very rarely so exact as something like $92.3 million. It could be $92,289,448 or $92,336,850 or some other clumsy number. Taking my colleague’s decimal point to heart, why would we not call those examples $92.29 million or $92.34 million?

There are often two competing values—the value your audience derives from clear understanding, and a figure’s exact value. To find a proper balance, ask these questions:

*By rounding off this number, am I painting a distorted picture for my reader?

*How would I tell this story over the breakfast table to a friend?

*Is a number’s exact amount a crucial element to the story?

Any time you suspect you may be straying too far from the precise number, then insert the word “about” or “nearly” or another qualifier that signals the figure is in the ballpark, but not in the exact seat.

Here are some examples. They are not Go Figure gospel, and you may want to vary your approach, but always keep in mind that you are writing for your average reader, not an accounting firm.

Actual amount: $8,426.67
Consider writing: $8,400 or $8,427

Actual amount: $842,667
Consider writing: $843,000 or “nearly $850,000”

Actual amount: $8,426,669
Consider writing: $8.4 million

Actual amount: $84,266,690
Consider writing: $84 million

Finding a Reason to Rhyme

One of the benefits of sharing math principles in person is being able to see eyes glaze over immediately, then backtrack to make sure the point is clear. But this column does not lend itself to that immediacy of feedback.

To address that reality, I have written 16 rhyming ditties, in a collection called “When You Go Figure,” that can help you keep some mathematical points straight. Take, for example, the Rule of 72.

If you want to see roughly how many years it would take for an investment to double, take 72 and divide it by the annual percentage rate of growth. With an 8-percent annual return, you would double your money in nine years (72 divided by 8). A 12-percent annual return would double your money in six years, and so forth.

Stated another (rhyming) way:

Know the Rule of 72
And it’s no trouble
To see how many years
For a figure to double

Another ditty warns against a pitfall frequently planted by marketers and advocacy groups:

“Fastest-growing” this
“Biggest-dropping” that
Always be wary
Of any hyphenated stat

And then there’s this one, which relates to this month’s topic:

What should you do
With an overly specific stat
It’s time to declare,
“Rounding off is where it’s at!”

If you are interested in the entire “When You Go Figure” set, drop me an e-mail. You can be sure that I will send it, without fail.

BARON BIT: It’s about time you considered nixing “approximately” from your writing. Why use a 13-letter word when “about” says the same thing?

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