The Difference Between a Statistic and a Fact

Context. JL


Morgan Housel reports in Collaborative Fund :

A statistic is just a number. And numbers are as easily manipulatable, incomplete, and misleading as words are. Facts are complete and unbiased enough to tell you something relevant to understanding the past or predicting the future. They don’t care about your goals. They’re uninterested in your politics.The more context, the closer you get to fact.
A statistic is just a number. And numbers are as easily manipulatable, incomplete, and misleading as words are. But they’re more dangerous than words, because numbers are associated with math, and math is associated with fact.
But facts are something special. Facts are complete and unbiased enough to tell you something relevant to understanding the past or predicting the future. They don’t care about your goals. They’re uninterested in your politics. They’re not trying to tell your story. They don’t have quarterly earnings expectations to meet. They drown themselves in context and explain blunt-force reality in all its glory.
Here’s an example. While covering a quarterly earnings report this summer, The Wall Street Journal reported:

Overall during the quarter, revenue rose 5.2% to $1.31 billion, helped by a change in how the company reports revenue. Without that change, revenue would have declined 15% to $1.06 billion

$1.31 billion is a statistic. $1.06 billion is a fact.
The latter is a fact – or at least more factual – because it has more context than the former. And that context comes far closer to explaining what actually happened in the past or is likely to happen in the future than the former.
There are so many examples of this.
Government debt has surged to an all-time high of $19 trillion, almost 200 times where it was at the end of World War 2? Statistic. Government debt is 105% of GDP, far below where it was at the end of World War 2? More factual.
Economic growth is low and labor-force participation has plunged? Statistic. A lot of both can be explained by demographics? More factual.
Millennials live paycheck to paycheck? Statistic. No generation saves money in their 20s? More factual.
The more context, the closer you get to fact.
The problem, you can see, is that all context is a shade a gray, and itself incomplete.
It’s the same with history. The book Why Don’t We Learn From History? explains:

[History] cannot be interpreted without the aid of imagination and intuition. The sheer quantity of evidence is so overwhelming that selection is inevitable. Where there is selection there is art.
Those who read history tend to look for what proves them right and confirms their personal opinions. They defend loyalties. They read with a purpose to affirm or to attack. They resist inconvenient truth since everyone wants to be on the side of the angels.

For the same reason history will never be settled, facts will never be black-and-white from statistics. Most of my life I’ve been realizing that what I thought was a fact was actually just a statistic. I expect that to continue.
So I’ve been trying to ask myself more often:

• What are some things that people I admire disagree with me on?
• How deeply have I dug into those things?
• Would changing my belief about those things hurt? In other words, am I going out of my way to rationalize something that might not be true?
• What lessons have I learned from other things that teach me where I’m likely to mistake a statistic for a fact?

Hopefully that gets me closer to the truth.