Feb 09, 2012
Truth in numbers
09 Feb 2012
Posted by Andrew Kantor
Contrast baseball’s “batting average” which makes sense: It goes from zero to 1.000. Meanwhile, a perfect NFL passer rating is 158.3 (in college it’s 1261.6). Huh?
Sure, there’s a detailed formula for calculating it — five of them, actually — and I’m sure the math is solid, but the final result doesn’t have a connection to reality. There’s no context. At least in baseball you can say that a guy who bats .500 gets a hit 50 percent of the time — twice as often as a guy who bats only .250.
Without context, even the most accurate numbers are, as far as I’m concerned, meaningless. (Just think about the kid who brags, “I got 100 on the SAT!”)
But baseball isn’t off the hook. Sure, batting average makes sense, but even sensible numbers aren’t useful if they aren’t the right numbers. Batting average, it turns out — as anyone who read Moneyball can tell you — isn’t very useful. It doesn’t take into account how often a player walks, or whether he gets extra bases. A guy who hits 25 triples in 100 at-bats will have the same average as a guy who hit 25 singles.
Finally, numbers have to be complete. If I told you I save 25 cents a gallon on gas by using a different station, that sounds good… until I mention that I have to drive 30 miles out of the way to do it. “Save 25 cents a gallon” is accurate and useful, but it’s not complete. (Think about that next time a politician claims to have created a gazillion jobs. What kind of jobs?)
So numbers have to have context, have to be useful, and have to be complete. Otherwise they’re just fancy squiggles. That’s why we work like gangbusters when we put together our Home Sales Reports. Tossing a lot of figures around is easy — but that doesn’t help you much. We want to be sure that not only are the numbers we give (and get) accurate, but that you can actually use them.
In real estate more than just about anything, numbers aren’t just numbers — they’re people’s homes and your livelihoods. So we’ve taken the extra steps to put these particular squiggles in context, and to talk to people about what they mean. You’ll see the fruits of our labor starting on page 22 of the February/March Commonwealth, which should be hitting your mailbox any day now if it hasn't already. Enjoy.