Steve Doig presents "Math and Data for Business Journalism Students" during the annual 2012 Reynolds Business Journalism Seminars, hosted by the Donald W. Reynolds National Center for Business Journalism. For more information about free training for business journalists, please visit businessjournalism.org.
Math and Data for Business Journalism Students by Steve Doig
1. Math and Data for
Business Journalism Students
STEVE DOIG
CRONKITE SCHOOL OF JOURNALISM
2. Math and data
Journalism students are terrified of math and think
Google answers everything.
Business coverage demands…
Good math skills
Good data analysis skills
We need to teach them how to use math to analyze
data
4. Business math
Percentage change
Compound interest
Rates
Consumer price index
Probability
Linear regression
Exotica:
Gini coefficient
H-H index
Benford’s Law
5. Percentage change
Measure change over time
NEW / OLD – 1
or (new – old) / old
Example: $8 million profit this year, $5 million
last year
8/5 - 1 = 1.6 - 1 = .6, or a 60% increase
Example: $5 million profit this year, $8 million
last year
5/8 – 1 = .625 – 1 = - .375, or a 37.5% decrease
6. Compound interest
Calculates the effect of interest being added to
principal over time, thus compounding the return
Future_value = present_value * (1 + i)^n
i = interest rate
n = number of periods (i.e., 360 for 30 year
mortgage paid monthly)
Many compound interest calculators on the Web:
http://www.webmath.com/compinterest.html
7. Rates
Allows comparisons between places/companies of
different size, or comparisons across time
Examples: Accident rates, foreclosure rates
Example: Jonesville has 50 of 20,000 homes in
foreclosure; Metropolis has 5,000 of 2 million in
foreclosure
Jonesville: (60 / 20000) * 1000 = 3 homes per 1,000
Metropolis: (4000 / 2000000) * 1000 = 2 homes per 1,000
8. Consumer price index
Accounts for inflation; lets you compare prices over
time in constant dollars
Price_now / cpi_now = price_then / cpi_then
Get CPI from Bureau of Labor Statistics at
www.bls.gov/CPI/
9. CPI example: Gasoline prices
CPI now = 226.4
CPI in 1965 was 30.8
Gasoline in 1965 was $0.30 per gallon.
X / 0.30 = 226.4 / 30.8
X = (226.4 / 30.8) * 0.30
X = 7.35 * 0.30 = 2.21
Therefore, gas in 1965 cost the equivalent of $2.21
per gallon in today’s dollars.
10. Probability
Most likely use in business journalism would be to
calculate the chances of some event occuring.
Also important in understanding p-values in
research papers.
Example: WSJ calculated the chances of executive
stock options being granted at the best possible time
and used the results to show that dozens of
companies were backdating option grants.
11. Linear regression
Useful for spotting outliers
Compares how one or more independent variables
affect the value of a dependent variable
Relationship can be seen in an X-Y scatterplot
Time-series regression: Time is X-axis
12. Other business statistics tools
Herfindahl-Hirschman Index: used to measure
market concentration
Gini coefficient: measures inequality in wealth
distribution
Benford’s Law: pattern of first digits in a collection of
numbers can reveal expense account cheating or
other man-made patterns.
13. Business data
Web sites your students should know:
Company Web sites for industries they cover.
Secretaries of State Web sites for incorporation records.
http://www.nass.org
Hoovers for company and industry information, (but it’s a
pay site). http://www.hoovers.com
Lexis/Nexis. http://www.lexisnexis.com/
14. Searching for data
Google (use advanced search)
Google Finance: www.google.com/finance
Bing
Wolfram Alpha?
15. More websites with business data
Edgar for SEC filings. http://www.sec.gov
The SEC site also contains enforcement data.
http://www.sec.gov/divisions/enforce.shtml
Bureau of Economic Analysis for updated state and
regional economy data. http://www.bea.gov
The Bureau of Labor Statistics has even more
economic statistics. http://www.bls.gov
The Federal Reserve has much information about
monetary policy and banking.
www.federalreserve.gov
16. Still more…
Patent and Trademark Office is sometimes useful.
http://www.uspto.gov/
Don’t forget the U.S. International Trade
Commission. http://www.usitc.gov/
And the U.S. Census Bureau for demographics.
http://www.census.gov
17. U.S. Census Bureau
It’s much more than headcounting – here’s just a
little of what business journalists can find at
census.gov:
Economic Census – local business data collected every five
years.
County business patterns.
Minority- and women-owned business data.
Building permits.
Foreign trade exports by state.
19. Foreign trade data
For example, from the Census Bureau, downloadable
from its Web site:
20. IRE resources
for business journalists
http://www.ire.org/store
Computer-Assisted Reporting: A Practical Guide,
by Brant Houston.
The Investigative Reporter’s Handbook: A Guide
to Documents, Databases and Techniques, by
Brant Houston, Len Bruzzese and Steve Weinberg.
Numbers in the Newsroom: Using Math and
Statistics in the Newsroom by Sarah Cohen. Part
of the IRE Beat Book series.
21. More IRE resources
IRE Resource Center: www.ire.org/resourcecenter/
Why reinvent the wheel?
More than 2,000 tip sheets from IRE and NICAR
conferences, many on covering the business beat
and doing investigations.
Searchable database of more than 20,000 stories,
both print and broadcast.
22. More IRE resources
The NICAR Database Library at
http://data.nicar.org/
Databases for business journalists:
SEC administrative proceedings.
Federal contracts data.
Home Mortgage Disclosure Act data.
IRS Exempt Organizations.
SBA business loans and disaster loans.
Federal Audit Clearinghouse Database.
Consumer Product Safety data
OSHA Workplace Safety data
Wage and Hour Enforcement
23. Good math resources
Innumeracy, by John Allen Paulos
A Mathematician Reads the Newspaper, by Paulos
Precision Journalism (4th ed.), by Phil Meyer
Math Tools for Journalists, by Kathleen Woodruff
Wickham
Cartoon Guide to Statistics, by Larry Gonick
Statistics Every Writer Should Know (website),
www.robertniles.com/stats/