Quantifcation as a Stunt

For any reasonably qualified student of economics, the mathematical and modeling skills are bound to be quite high. Indeed they are now thought to be a good predictor for successful completion of any graduate course in economics. This is a view that is almost accepted by a majority of economists and has begun to creep throughout the other social sciences. One is not a serious policy wonk or academic unless there is a high facility with numbers and modelling techniques.

What many economists have yet to explain properly is that the need to quantify more and more things sometimes leads to very ridiculous results. Nobody takes a more measured view on the use for calculus and other higher order mathematical techniques than John Kay. In his latest article, he gives an interesting view of how far the demand for quantification is taken with the result that beautiful algorithms explain nothing that was unknown. Taking forward his example, the UNDP's Human Development Index is itself derived from education levels, national income levels and life expectancy and in spite of the concoction of a sophisticated formula, it reveals nothing more than was plugged into the algorithm.

In a matter of speaking, it is just a mathematical stunt because it correlates so highly with income that there is little distinction between the two. Citizens of countries with sophisticated economies will have higher life expectancy and higher educational attainment. To put the three by according them different weights is a matter of taste and the resulting index is not useful.