Have you ever felt that sta­tis­tics pre­sent­ed by pub­lic of­fi­cials may be out of touch with the re­al­i­ty hap­pen­ing in the econ­o­my or oth­er events in the coun­try?

For in­stance, when a drop in the in­fla­tion rate is an­nounced yet pur­chas­ing pow­er re­mains lim­it­ed?

In giv­ing his per­spec­tive on da­ta ver­sus re­al­i­ty Garvin Joe­field, econ­o­mist with the Eco­nom­ic In­tel­li­gence Unit at Re­pub­lic Bank, said when pub­lic of­fi­cials use da­ta to high­light what are os­ten­si­bly pos­i­tive de­vel­op­ments, they are ac­cused of be­ing out of touch if pub­lic sen­ti­ment or the ex­pe­ri­ences of size­able sec­tions of the pop­u­la­tion are con­trary to what the sta­tis­tics say.

In a pa­per ti­tled, “How it feels ver­sus what the da­ta says,” which he shared with the Sun­day Busi­ness Guardian, Joe­field not­ed this con­flict be­tween what peo­ple feel and what da­ta says is per­haps most strik­ing when it is as­so­ci­at­ed with the per­for­mance of the econ­o­my or the preva­lence of crime, but is by no means lim­it­ed to these vari­ables.

He stat­ed these are among the few dis­agree­ments where both sides are cor­rect, de­spite their ten­den­cy to ac­cuse each oth­er of be­ing un­rea­son­able, un­car­ing and wil­ful­ly blind, among oth­er things. He said these dis­putes can be trig­gered by nu­mer­ous fac­tors in­clud­ing per­son­al, eco­nom­ic, po­lit­i­cal and en­vi­ron­men­tal.

Such dis­putes, Joe­field said, oc­cur of­ten in the realm of eco­nom­ics, where it nor­mal­ly takes time for the sen­ti­ment to catch up to the da­ta.

“It’s not un­com­mon for sharp crit­i­cisms to be di­rect­ed at pol­i­cy­mak­ers who tout GDP growth fig­ures or falling un­em­ploy­ment with­out ac­knowl­edg­ing the pres­sures that are fac­ing many cit­i­zens.

“At the cen­tre of this dis­agree­ment, are nor­mal­ly sec­tions of the pop­u­la­tion who are yet to ma­te­ri­al­ly ben­e­fit from the im­prove­ment be­ing de­scribed, or may even feel worse off, de­spite the de­vel­op­ments iden­ti­fied by the sta­tis­tics. A ma­jor cause for this dis­so­nance is nor­mal­ly in­fla­tion,” Joe­field ex­plained.

Fur­ther he stat­ed when prices rise but con­sumers’ in­come re­mains un­changed, or rise at a slow­er rate, they are es­sen­tial­ly poor­er, as they are able to pur­chase few­er goods.

“For low in­come house­holds, it of­ten means they must choose which es­sen­tial/ba­sic goods to buy less of, or to not buy al­to­geth­er, which is a dif­fi­cult propo­si­tion in­deed,” Joe­field said, adding that a sig­nif­i­cant in­crease in in­fla­tion rates in 2022 and ear­ly 2023 was the per­fect ex­am­ple of this sit­u­a­tion.

An­oth­er source of the feel ver­sus da­ta con­flict is fear, Joe­field iden­ti­fied, stat­ing that al­though fear can be an ef­fec­tive mo­ti­va­tor in many cas­es, it can sig­nif­i­cant­ly im­pede one’s ca­pac­i­ty and will­ing­ness to ac­cept and process da­ta and log­i­cal ar­gu­ments.

For in­stance, he ex­plained most cit­i­zens judge the preva­lence of crime by the num­ber of mur­ders record­ed in any par­tic­u­lar pe­ri­od.

“The more mur­ders com­mit­ted, the less se­cure the av­er­age cit­i­zen feels. Against this back­drop, the Po­lice Ser­vice is some­times pil­lo­ried when it iden­ti­fies de­clines in oth­er cat­e­gories of crime, es­sen­tial­ly be­ing urged to read the room,” he added.

How­ev­er, the feel ver­sus da­ta clash can be mit­i­gat­ed and in many cas­es, re­solved.

First­ly Joe­field ad­vised, ac­tion is need­ed to build an ap­pre­ci­a­tion among the peo­ple or in­sti­tu­tions that usu­al­ly pub­li­cise po­ten­tial­ly con­tentious da­ta, that the en­tire sto­ry is not con­tained in the in­for­ma­tion they in­tend to share.

Sec­ond­ly, there should be mech­a­nisms to as­sure re­cip­i­ents of in­for­ma­tion that con­tra­dicts the re­al­i­ties they face, their con­cerns are le­git­i­mate and they have the right to feel the way they do.

He em­pha­sised com­mu­ni­ca­tion train­ing, sen­si­ti­sa­tion pro­grammes and ed­u­ca­tion pro­grammes for the pub­lic by da­ta man­age­ment or­gan­i­sa­tions such as the Cen­tral Sta­tis­ti­cal Of­fice, ex­plain­ing how da­ta is gath­ered, analysed and dis­sem­i­nat­ed are crit­i­cal.

Attzs agrees

De­vel­op­ment econ­o­mist Dr Mar­lene Attzs agreed there is there a dis­con­nect be­tween eco­nom­ic da­ta (on in­fla­tion, un­em­ploy­ment and GDP growth) and how that is per­ceived by some seg­ments of the pop­u­la­tion.

Attzs be­lieves this is due to a com­bi­na­tion of fac­tors, in­clud­ing a lim­it­ed un­der­stand­ing of the na­ture and struc­ture of the T&T econ­o­my, method­olo­gies be­hind how these da­ta are col­lect­ed and al­so, un­for­tu­nate­ly, the politi­ci­sa­tion of eco­nom­ic nar­ra­tives to suit par­tic­u­lar mo­tives.

“In an en­er­gy-based econ­o­my like T&T, GDP growth can some­times paint a mis­lead­ing pic­ture. When en­er­gy prices or pro­duc­tion in­crease, they can dri­ve up over­all GDP, even if growth in oth­er parts of the econ­o­my, such as in agri­cul­ture or in mi­cro and small busi­ness­es, re­main stag­nant.

“This of­ten cre­ates a dis­con­nect: while the da­ta shows the econ­o­my is grow­ing, peo­ple work­ing out­side the en­er­gy sec­tor may see lit­tle to no ben­e­fit. This is a com­mon chal­lenge we face in T&T: head­lines that say ‘The econ­o­my is im­prov­ing” at times sup­port­ed by pos­i­tive GDP num­bers, are dis­missed by many cit­i­zens be­cause their day-to-day re­al­i­ty - be it un­em­ploy­ment, low wages, or per­sis­tent hard­ship - re­mains un­changed,” Attzs ex­plained.

For these in­di­vid­u­als, she said the num­bers don’t re­flect their re­al­i­ty, lead­ing to scep­ti­cism about whether the econ­o­my is tru­ly get­ting bet­ter.

“This gap be­tween eco­nom­ic da­ta and lived ex­pe­ri­ence is a ma­jor is­sue that needs ad­dress­ing if we are to build a more in­clu­sive and re­silient econ­o­my,” Attzs added.

Ad­di­tion­al­ly, she said eco­nom­ic da­ta is of­ten pre­sent­ed as part of a broad­er po­lit­i­cal nar­ra­tive, which can fur­ther con­fuse pub­lic per­cep­tion.

“Gov­ern­ments may high­light favourable met­rics, such as GDP growth or low in­fla­tion, while op­po­si­tion par­ties may fo­cus on neg­a­tive as­pects, pre­sent­ing even mar­gin­al eco­nom­ic chal­lenges as eco­nom­ic crises.

“Nei­ther po­si­tion is help­ful, as it leaves the pub­lic con­fused and scep­ti­cal, ul­ti­mate­ly erod­ing trust in eco­nom­ic da­ta. This high­lights the im­por­tance of con­tin­u­ous pub­lic ed­u­ca­tion, par­tic­u­lar­ly on what the da­ta means for in­di­vid­u­als in prac­ti­cal, every­day terms, rather than fo­cus­ing sole­ly on macro­eco­nom­ic nu­ances,” she added.

Mean­while, UWI econ­o­mist Vaalmik­ki Ar­joon al­so agreed that there is a dis­con­nect in how da­ta is per­ceived.

He cit­ed in­fla­tion as a key ex­am­ple, ar­gu­ing that prices lo­cal­ly have been high for sev­er­al years, giv­en that T&T im­ports much of what is used lo­cal­ly. The cost of these items from sup­pli­ers in­creased over the years due to sup­ply chain is­sues, to­geth­er with ship­ping chal­lenges, in­creased fu­el and trans­port costs and black mar­ket forex rates.

He said in the last five years, prices on av­er­age in­creased by 15 per cent with food prices in­creas­ing by 32 per cent.

“In the ear­li­er part of 2023, in­fla­tion ranged be­tween six per cent to 8.3 per cent, but this has since slowed sig­nif­i­cant­ly to rates be­low one per cent, with the most re­cent val­ue at 0.5 per cent in No­vem­ber 2024. Food in­fla­tion is 3.1 per cent.

“How­ev­er a low­er rate of in­fla­tion does not mean that prices are falling. In­fla­tion is the rate at which prices are in­creas­ing or the per­cent­age change in prices over a year,” he ex­plained. There­fore, Ar­joon said prices are still high, but on av­er­age are in­creas­ing at a much slow­er rate.

For ex­am­ple he cit­ed if a house­hold is pay­ing $2,000 per week for a bas­ket of goods, con­sid­ered a high cost, and in­fla­tion is 0.5 per cent, then it means that the cost will in­crease to $2,100.

“There­fore even though in­fla­tion is low, the cost is still high to the house­hold. With prices in­creas­ing over the past sev­er­al years, the pur­chas­ing pow­er of house­holds have di­min­ished, es­pe­cial­ly since salaries have re­mained stag­nant for many,” he ex­plained.