Improving the communication of economics and economic statistics

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Improving the communication of economics and economic statistics

Topic:

Communicating statistics

Blogs

By Mike Hughes

RES

As part of the Royal Economic Society (RES) annual conference 2021, ESCoE organised and participated in two special sessions. You can read about our session on ‘Finding the missing capitals: Sources of growth redefined’ in the blog by ONS’ Josh Martin here. In this blog I set out the research presented and discussed in our other session ‘Improving the communication of economics and economic statistics’. Organised jointly with the Royal Statistical Society (RSS) and the Office for National Statistics (ONS), and chaired by Sumit Dey-Chowdhury (ONS), this session saw ESCoE Research Associates Johnny Runge present ‘Public Understanding of Economics and Economic Statistics’ and James Mitchell present ‘Communicating Data Uncertainty: Experimental Evidence for U.K. GDP’. Nida Broughton (Behavioural Insights Team) also presented ‘Enhancing central bank communications using simple and relatable information’. The presentations were followed by a discussion that I led. A full recording of the session is available from RES here.

Overview

Economics pervades everything we do, and it plays a key role in most aspects of our lives. A basic understanding of economics and economic issues helps us make decisions at home and at work, to perform our democratic duty in holding elected representatives and other policy makers accountable, and to evaluate government performance. Economic statistics are prominent in almost every news story about the impact of economic policy.

However, as Andy Haldane has said, then Chief Economist of the Bank of England, the economics profession faces a ‘twin deficit’: surveys show that the public lack a basic understanding of the economy and they distrust the economics profession. An important way to tackle this ‘twin deficit’ is to improve our communication with the public, but currently surveys show that people find economics is communicated in an inaccessible way, dominated by expert and abstract language, and using too much economic jargon.

This session brought together some of the latest research on public understanding and the communication of economics and economic statistics, including focus group research and survey information experiments, in order to discuss how the economics profession as a whole can address the twin deficit. In particular, how to make the communication of economic issues more accessible, engaging and relevant to the public; as well as identifying key research gaps that hinder the development of effective communication strategies.

Presentation 1: ‘Public Understanding of Economics and Economic Statistics’ – Johnny Runge and Nathan Hudson

As statistics are used, and sometimes misused, in public debate, it is increasingly important to improve the communication of statistics to the public, and make statistics more accessible, engaging and easier to understand. In order to achieve this, it is necessary to get a better grasp of how the public currently understand statistics.

In presenting the research, Johnny outlined how ESCoE had addressed this task by undertaking mixed-methods research on UK public understanding of economic statistics, including 12 focus groups with 130 participants, 20 online interviews, and a nationally representative survey with 1,500 respondents.

The overriding finding was that public understanding of economic statistics can be described as ‘thin’ and ‘superficial’. For example, participants struggled to speak about or evaluate economic indicators when presented as absolute numbers or as proportions or rates in percentages, and people seek out different shortcuts to make sense of statistics presented to them, such as seeing its historic trajectory or comparisons between countries. The researchers also find that participants’ understanding of, and trust in, a particular statistic are often affected by their (mis)understandings of how it is collected and measured, as well as its source.

Overall, Johnny and Nathan believed the findings can and should be used to design and test new communication practices and inform how the communication of statistics to the public can be improved.

Presentation 2:‘Communicating Data Uncertainty: Experimental Evidence for UK GDP’ – James Mitchell and Ana Galvao

James outlined the main findings of a paper he had prepared jointly with Ana Galvao.

Many economic statistics are subject to data revisions. But initial estimates of GDP growth are commonly published without any direct quantitative indication of their uncertainty. To assess if and how the public interpret and understand UK GDP data uncertainty, two sets of randomised controlled online survey experiments were conducted, one at a time of growth and one during a recession.

The surveys are designed to assess:

  • perceptions of the uncertainty in single-valued GDP growth numbers;
  • the public’s interpretation and understanding of uncertainty information communicated in different formats; and
  • how communicating uncertainty affects trust in the data and the producers of these data.

The research found that the majority of the public understand there is uncertainty inherent in GDP numbers but communicating uncertainty information improves the public’s understanding of why data revisions happen. It encourages them not to take GDP point estimates at face-value, but crucially this does not decrease trust in the data. It was found that it is especially helpful to communicate uncertainty information quantitatively using intervals, density strips and bell curves.

Presentation 3: ‘Enhancing central bank communications using simple and relatable information’ – Nida Broughton

Nida outlined the research the Behavioural Insights Team (BIT) had undertaken with colleagues from the Bank of England to improve the Bank’s communication of economic messages.

Central bankers and the central banking literature are increasingly attuned to the importance of communications as a policy tool. However, less is known about how central bank communications should be drafted for maximal impact. The BIT research has contributed new insights in this regard.

Using a large-scale online experiment with a sample representative of the UK population, the research has identified the communicative techniques that increase public comprehension and trust in monetary and macroeconomic policy messages. Key findings include that the simplification of language increases public comprehension more than the inclusion of visuals, and that public comprehension can be improved by making monetary policy messages relatable to people’s lives. Relatable content also increases the public’s trust in central bank communications and improves people’s perceptions of the central bank.

The BIT findings shed light on how central banks can improve communication with the public at a time when trust in public institutions has fallen, while the responsibilities delegated to central banks have increased.

Discussion

In opening the discussion, I indicated that the need for improved communication of economic statistics was not a new problem and improving the presentation and communication of statistics has been a recurring theme throughout my 30 years in the Government Statistical Service. I hoped this session would give impetus to some improvements.

I had contributed to Johnny and Nathan’s study and had sat in on a couple of the focus groups. Three things in particular had stood out for me in terms of the public’s understanding of, and trust in, the statistics:

  • firstly, trust in the value of a particular statistic was heavily dependent on the individual’s personal experience or his/her environment. The sentiments behind the now famous cry of the lady in Newcastle of “that’s your GDP, not ours” was a common feature in the study;
  • secondly, knowledge of the underlying methodology for a particular statistic improved the focus group’s understanding of and trust in the figures, for example, knowledge of the ‘basket of goods’ in price inflation measurement and the basis of the unemployment statistics;
  • thirdly, the definitional coverage of the measures of employment and unemployment which caused incredulity in some focus group members, in particular the inclusion of individuals on zero-hours contracts in the employment figures. I feel that ONS needs to consider whether they produce a version of employment statistics excluding limited employment along similar lines to the separation of the treatment of housing costs in the Consumer Prices Index (CPI) and the Consumer Price Index including owner-occupiers’ housing costs (CPIH).

What should we conclude from the above? The need for an improvement in communication of economic statistics was summarised well by Sir Charles Bean in his independent review of Economic Statistics in 2016, where recommendation 7 stated Statistical releases should contain clear and prominent commentary on the quality of those statistics, noting any significant limitations and also highlighting any scope for misinterpretation.

However, on the basis of the ESCoE and BIT studies detailed above, I am of the view that added to this list should be a simple explanation of the underlying methodology and, where appropriate, a recognition of what the BIT calls relatable content. I point to the significance of the statement “A professional sees things through a professional eye but a good communicator sees things through the user’s eyes.”

Bean went on to say that much media and market commentary and political discourse treats statistics with a precision and reverence that is totally unwarranted, the point emphasised in James’ presentation about uncertainty in estimates.

I emphasised in my discussion that there is no silver bullet to the improvement in communication and the situation calls for a number of separate measures, across a wide and disparate range of practitioners. I am struck by the benefits gained by the Bank of England from the BIT’s work on simplified commentaries and relatable content and would encourage ONS to consider how similar techniques could be applied to their communications. I would also emphasise that responsibility for improved communication rests not just with the producers of statistics. The role of economic commentators and journalists as intermediaries in the communication process should also be addressed.

Where do we go from here?

Following their initial research, the ESCoE researchers have conducted a further round of 15 workshops along similar lines to the focus groups, though an experienced economist or statistician had sat in on each of these to observe the publics’ discussion. The aim was to bring economists closer to public perspectives on the economy and to encourage them to reflect on what they learned and how these insights could potentially improve how they communicate with the public in the future.

The ESCoE report will be published shortly, but the main finding is that the economists involved believed the workshop format fulfilled the aim of increasing their knowledge of public understanding in ways that could improve their future communication with the public. They advocated for more similar or extended exercises to reach a wider group of economists.

ESCoE are also now considering further research to explore the role of intermediaries in the communication process.

As a result of the Bean Review, the RES and the RSS established the Economic Statistics Working Group (ESWG) in 2017, which hitherto has focused on training and seminars for economists on the measurement of economic statistics. That working group has since expanded to also include senior representatives of ONS, ESCoE and the Society of Professional Economists, so now represents a broad range of professional economists. This communication topic is now on the ESWG’s agenda and ESWG will be considering how it can contribute to the better communication of economic statistics.

Mike Hughes is a member of the RSS National Statistics Advisory Group and Statistics Adviser at Full Fact

ESCoE blogs are published to further debate. Any views expressed are solely those of the author(s) and so cannot be taken to represent those of the ESCoE, its partner institutions or the Office for National Statistics.

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