Thomas Piketty Responds to Criticism of His Data

In this age of metrics everywhere, evidence-based everything, big data...<p>I think what this story actually is, is a reminder that just because something is based on quantitative data, that doesn&#x27;t make it &#x27;objective&#x27; or automatically &#x27;truth&#x27;.<p>Quantitative analysis rests on so many choices, as to how to measure, what measurements to use, what statistical formula to use, how to interpret what they say. Each of those choices can be mistaken -- _or_, even more troubling to the worldview that quantitative==objective truth, be subject to debate among reasonable and well-intentioned people about the best choices to make and the implications thereof.<p>I&#x27;m not saying it means there is no &#x27;truth&#x27;, and all research conclusions are equally valid. I&#x27;m saying that research conclusions based on quantitative data, no less than those based on qualitative information, are subject to debate and argument, not physical objective material reality simply because there were measurements and numbers involved.

Unfortunately, ultimately, the research, data and analysis isn&#x27;t going to matter much.<p>Consider the debate on climate change, 98% of climate scientists agree that humans contribute significantly to climate change, but large numbers of Americans (including some of the most powerful politicians and talk-radio hosts) either deny climate change or claim that humans don&#x27;t do much to cause climate change.<p>I expect the inequality debate to play out in a similar fashion. Many economists may agree with Piketty. However, the FT has thrown sufficient &quot;doubt&quot; on his findings (it doesn&#x27;t matter that they compare past tax data with today&#x27;s &quot;survey&quot; data etc).<p>This &quot;doubt&quot; provides sufficient ammunition for those who&#x27;d like to deny that inequality is on the increase. So the debate will end up as another one of those &quot;he said, he said&quot; topics in the media and people are likely to take sides based on which side of the ideological divide they are one.

Response in full (pdf): <a href="http://piketty.pse.ens.fr/files/capital21c/en/Piketty2014TechnicalAppendixResponsetoFT.pdf" rel="nofollow">http:&#x2F;&#x2F;piketty.pse.ens.fr&#x2F;files&#x2F;capital21c&#x2F;en&#x2F;Piketty2014Tec...</a>

The FT is actually a pretty balanced high quality paper - but their alternative analysis of the Piketty data is shoddy.<p>I can&#x27;t imagine any good comeback from them to Pikettys comeback.

Most data is released to the public in ways to make the data as use-less as possible. This is particularly true with economic data and SEC financial information. So, none of this type of &quot;noise&quot; or its analogue &quot;noise cancellation&quot; should really be taken at face value. The threshold for even disclosure of such mistakes is typically based on &quot;material adversity&quot;, and this is the type of standard which people should look to in this case. The question is simply does it move the needle? Its not clear from reading these multiple threads that it does.