On Data

& Stats

Krisna Gupta

krisna.or.id/slides/cipsdata/

Krisna Gupta who? 👀

• Associate researcher di CIPS.

• Economics PhD Student di Australian National University.

• Double degree Master in Econ dari UI / VU Amsterdam..

• Research on trade & industry in Indonesia.

• Blogs & sing in spare time. L’arcenCiel fan.

Some publications 😎

About today

• Some intro
• Various ways data is presented
• Some stats
• Economic data
• Q&A

I assume y’all have never worked with data before
I try to allocate more for Q&A

Intro

Why?

• Efficient & powerful to support your story.

  • you don’t really need to be a math&stat-savy.

• Shows how good you are in understanding an issue.

• Objective, most of the time.

• Everyone use ’em these days. Tough luck for data haters.

Data is getting mainstream

via GIPHY

Some of my fave data source

• For trade, UN Comtrade https://comtrade.un.org/data/.
• General economic data, World Bank’s World Development Indicators https://data.worldbank.org/.
• Bank Indonesia (just google “SEKI Bank Indonesia”).
• BPS (either hit https://www.bps.go.id/ or query your keyword in google + ‘BPS’).
• ask them researchers.

Some jargons

• Cross-sectional data: contains a snapshot of many subjects/individuals (people, countries, firms, etc) in a given time.

• Time-series data: one subject observed for a long(-ish) periods of time.

  • Good if trend is important.

• Panel data: combination of the two.

Various ways data is presented

Cartesian plane

• A 2-dimensional plane.

  • pay attention to the x & y axis

• Generally 2 forms: bar/column and line.

• line chart is perfect for time series data.

  • usually x=time, y=value. ex

• bar chart usually for cross-section data.

  • can be for time series too if you have one individual. ex

• on values: check out the units!

Tables

• Not the best visualization but very flexible. (ex)[https://comtrade.un.org/data/]

  • easy to costumize with templates & other viz.
  • can store many variables.

• The most mainstream tools are microsoft excel & Google sheet.

  • Hence It’s best to have a .csv or .xlsx or something similar.

• I certainly prefer working with these formats (among others)

Tables

• First row is usually shows variables.
• Note that a machine-readable tables are the best!
  • i.e., it is better to have one row for variables.
• Example of bad machine-readability

Units in the X, Y and columns

• Never lose sight of the units of your value.

  • e.g., thousand or millions, kg or ton, etc.

• Especially important if you use various data source.

  • BI’s trade data is in 1000USD while Comtrade’s in USD.

• Always read what’s X and Y.

  • if you make the graph, always write what’s X and Y.

Some statistics

The need to aggregate

• How to process an information of the income of 1 million people?

• When we have data of 1 million people, it’s impractical to look at 1 million values.

• We look for one number that represent these 1 million values.

  • this is usually the average (or mean).

• We also need to understand how the value is distributed.

  • called standard deviation.

Normal distribution

• If we group values, take frequency, then sort them, we can make a distribution plot.

• We can make a smooth approximation of the distribution plot with functions.

• The most famous distribution is the normal distribution

• Normal distribution’s characteristics:

  • frequency is highest around the mean
  • the tail is skinny (i.e., frequency is very small in the extremes)

Normal distribution

Normal distribution

When to use median

• Median is the value lying in the middle of the whole group if we sort the value.

• If we have 1 million people:

  • Sort their income from lowest to highest.
  • Median is the income of the 500.000th person.

• Median is often use in the presence of non-trivial number of extreme values (i.e., fat tail).

• income is often not distributed normally, so median is better.

• example in excel.

Find more statistics at Statista

Economic data

Real vs nominal

• We use currency to express many economic variables.

• We can’t aggregate car + food.

  • we can 200 million + 50 thousand.

• But really what we want is the car and the food, not the money.

• We need to take into account change in prices (i.e., inflation)

Real vs nominal

• Say a firm can make 1 car and 100 food in 2020.

• The firm’s GDP is $1 \times 200 + 100 \times 0.05 = 205$

• in 2021, car’s price is increase to 210, hence GDP becomes 215.

• Increased GDP?

  • not really, cuz the firm still just produced 1 car and 100 food.

Real vs nominal

• It’s easy to imagine the complexity of this stuff in reality.

• One thing is clear though: we want to exclude increase in GDP from price effect.

• To avoid price effect, we use 2020 price so we can compare 2020 GDP with 2021 GDP.

• Real GDP = When we use old prices.

Real vs nominal

• Obviously to keep comparing, we still need to use 2020 prices when we calculate 2022 GDP.

• also when we calculate GDP in 2023, etc.

• Because we keep using 2020 prices, we say ‘constant price’.

  • 2020 is called ‘reference year’.
  • nominal GDP is calculate using ‘current price’.
  • nominal GDP = constant real GDP in the reference year.

• The constant price changes from time to time.

GDP vs GDP per capita

• GDP is an aggregate of the whole economy.

  • used to show how big & important the country is.

• GDP per capita is the mean/average

  • used to reflect living standard & productivity.

• Singapore vs Indonesia: rich vs powerful.

Fraction

• Fraction is usually expressed with percent.

• We use fraction to express how important an individual is to the group/population.

• India imports 3.05 billion USD of CPO from Indonesia doesn’t say a lot.

  • India imports 61% of its CPO from Indonesia says how important supplier Indonesia is.
  • From Malaysia ~32%, FYI.

Percent change / growth

• Growth is important to reflect how fast something is changing.

• Percent change is nice cuz it’s unit-free.

• It linearizes non-linear thing, which’s good and bad.

• If your income drop by 50% today, will 50% increase tomorrow get you back to your old income?

Index

• Index is prolly the most confusing thing.

• Index can be in many forms with many different weight.

  • sometimes you might need to check its formula.
  • the purpose of index is still to give us one representative number to reflect the big picture.

• For example, consumer price index (CPI) calculates a change in price level of many consumer goods.

• Indeks Kedalaman Kemiskinan shows how deep the poverty of some area is.

A note on CPI and similar indices

• CPI and many other indicies are shown in number near 100.

• That’s because CPI is calculated as compared to 100.

  • 100 is the ‘base’, the year where CPI=100 is called reference year.

• For example, if CPI in 2010=100 while 2020=154, that means prices in 2020 is 54% higher than 2010.

Q & A

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