The clichés about the distortions and even falsehoods that the science of statistics can invent are as old and worn as the numbers themselves. The decision how to define and measure the average basket of consumer purchases, for example, or the most correct method of neutralizing seasonality in unemployment and wage statistics, and even how to measure the rate of change in home prices and numbers of homes sold, have given rise to countless studies, disputes, and alternative measurements. Even the Central Bureau of Statistics itself constantly reports changes in methods of measurement, and appends endless notes and caveats to almost every report.
Precisely because of this, because there will always be doubts and questions about statistical data, the most critical condition is that the system for gathering and reporting the figures should be manned by people of integrity unmoved by extraneous considerations. People about whom we can argue for ever that they may erred professionally, but whom we would not dare even to think are motivated by personal or political interest.
The ethical rules published by the Central Bureau of Statistics state that it "manages its activity scientifically, fairly, and transparently," and that it will "maintain a proper professional standard and will carry out its work honestly and without favor, on the basis of scientific principles."
Warning signs from Greece and Russia
The current mixing of politics in the work of the Central Bureau of Statistics, in the form of the attempt to appoint Prime Minister Benjamin Netanyahu’s associate Yossi Shelley, currently director general of the Prime Minister's Office, as acting Chief Statistician, which follows efforts to control other appointments at the Bureau, is therefore no less than scary. The temptation to place there someone who will help to paint a rosy picture of reality, that might even come true, is all too understandable. How sad that the crack through which the attempt to do so is being made was inadvertently opened up by the previous government, which sought to widen the circle of potential heads of the Central Bureau of Statistics from professors of statistics (the number of whom can be counted on one hand) to people with doctorates in data and computing, as befits an organization that is supposed to provide data in the 21st century, and that has some 1,200 employees and an annual budget of NIS 250 million.
At a time when confidence in the banks is a subject for headlines all over the world, and the importance of the credibility and independence of the courts is at the center of Israeli political discourse, it’s important that we should understand how critical is confidence in the government institution that provides us with the macro data, and that tells us almost everything we know about the Israel economy.
In countries like Greece, Argentina and Russia, the government’s statistical bodies long ago became politically biased. We don’t want to go there. If we cannot rely on the inflation rate that will be published today, or the one published next month, why, and how, should we continue to take out loans linked to the Consumer Price Index? And how exactly will the Bank of Israel decide whether to continue raising its interest rate, or whether the time has come to reduce it?
Published by Globes, Israel business news - en.globes.co.il - on March 15, 2023.
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