On Economics, Prediction and two dollar wafflemakers

I always enjoy the Black Friday coverage in the news because we get to see reporters attempting to do something that , arguably, they don’t do particularly well.  Basically, Black Friday and Election Day are the two times we see members of the media attempting to sound knowledgeable as they attempt to predict the future.  That is, in both cases they tend to do things like:

Go to a location and watch what people do (shop, vote, riot)

Interview people and ask them about what they’re doing

And then go on to make larger predictions about what the economy will be like in the coming year based on their twenty minute observation period of a bunch of nonrandomly selected Walmart shoppers in their general area (just as later in the year, they will predict who will win the election based on their trip down to their local precinct).

As research methods scholars, hopefully, you have all been equally aghast at these reporters as you have watched them this week.  Some of the more egregious research methods violations I have observed have included:

1.        Commentators on the Today Show watching someone’s cell-phone video of a riot at the Walmart over the aforementioned waffle makers – authoritatively making  pronouncements such as “Yes, this is a sign of people’s desperation in these challenging economic times.”  Or “You can really see the decline of America here, as people are becoming more violent.”  The question is, I suppose, how many Walmart riots would you have to have observed, and in how many different locations, before you could actually say something generalizable about them?  Was this particular Walmart generalizable to the larger population of Walmarts?  Were the shoppers representative?  Why or why not?  (Also, were there any racist overtones to the media reporting on these issues?  If the rioters had been white, do you think the language would have been the same?  Perhaps it might have been described as “a tussle”, rather than “a riot”.  What do you think?)

2.        Here’s a typical report in which the reporter aggregates together a variety of violent incidents in the US and presents them to viewers. But we need to ask – are these news reports representative?  How did the reporter choose them?  Does this mean that ALL stores had violent incidents?

3.        Commentators this morning on the Today Show engaged in a somewhat more methodologically nuanced discussion regarding exactly what the economic spending figures from the weekend actually tell us.  At least one analyst pointed out that it’s a bit simplistic to make the claim that “More people spent more money this weekend and that shows that consumer confidence is up and the economy will be on the upswing.”  She somewhat intelligently pointed out that in fact one might want to know whether the people who spent a great deal of money actually HAD that money (which they were thus putting into circulation in the economy) or whether in fact they were simply wracking  up additional debts that they would then not be able to pay.   (For more on that point, I’d like to introduce you to one of my favorite videos of all-time).

The Today commentator then actually made the following statement, which I thought was interesting:  “If in fact people were merely charging things they couldn’t afford, then that would explain why most of the spending occurred early on Friday and then settled down around  Saturday evening.  This might be a sign that people were reaching their credit limits.”  She then went on to point out that there had been previous years when people spent a lot of Black Friday but then spent little for the rest of the holiday season.    In other words, one shouldn’t extrapolate a trend based on only looking at one data point.

4.        Finally, there was an interesting conversation in many venues about the SES or socioeconomic status of the people lining up on Black Friday.  If most of those who line up for deals early on Friday morning are of lower socioeconomic status, then what that mean?  Here, one would have to actually have empirical evidence that this was the case.  At least some of the Occupy websites suggest that lower SES individuals have been “manipulated” by corporations into wanting things they can’t afford and spending money they cannot have.  Others have suggested that only lower SES people would be desperate enough to participate in the Black Friday madness.  The first statement seems to imply that lower SES people are more easily manipulated, something which seems a bit condescending and maybe even racist.  Honestly, there’s probably a research article in there somewhere --  but it would involve studying Black Friday in a methodologically rigorous way – through selecting a variety of locations to observe, or perhaps recruiting people to answer a survey about why they participate in these events.  What might you study if you had the chance?