Of Narratives & Numbers.

• Author: Grabel, Nicole

Do numbers tell the story or do we? Recognizing the way our own narratives influence the way we see numbers can lead to better decision making.

It is probably safe to assume that finance officers are more comfortable with numbers than most of the decision-makers the finance officer supports. These decision-makers are likely more comfortable with narratives. Numbers are often part of the conversation, but psychological research shows that people often grossly misunderstand and/or misuse numbers in favor of their preferred narrative. Of course, finance officers are people too, and they can fall prey to the same pitfalls as less numerate people. A better understanding of the relationship between narratives and numbers can help us structure decisions more wisely.

In this article, we will explore narratives and numbers in four parts:

What we see is all there is. We tend to overemphasize the information that is most tangible or available.

Numbers are often abstract by comparison.

We string that into a causal story. People are good at finding patterns. Often, this is a big advantage, but it can also lead us to find patterns where there are none.

We continually confirm that story. We want to be right. We tend to overweight information that supports our preferred conclusions and discount information that doesn't.

We translate our inferences imperfectly. We are not good at evaluating the accuracy of our stories.

WHAT WE SEE IS ALL THERE IS

Numbers are an abstraction of reality. Therefore, people tend to gravitate toward vivid information like examples or anecdotes. In particular, people tend to emphasize information that is easy to recall. They may recall recent experiences and overlook relevant but older information. For example, the views of the citizen who spoke at the most recent public hearing may be weighed more heavily than views expressed at older meetings. People also recall vivid or extreme examples more easily. So, for instance, a recent natural disaster might get more attention in planning mitigations than another type of disaster that has historically been more commonplace.

People's attraction to narratives and examples means that we can be swayed by anecdotal evidence and overlook broader, more informative statistics. We've all encountered the argument: "Well, I know a person who ... [insert personal experience that seemingly disproves a broader statistic]." This can happen in public administration too. For example, when evaluating the effectiveness of a program, people might focus on specific program clients that the program has helped or failed to help rather than looking at a larger sample of program participants.

WE STRING WHAT WE SEE INTO A CAUSAL STORY

Human beings are great at finding patterns in information, but the downside of this ability is that we are prone to find patterns in places where meaningful patterns don't exist. These false patterns become the basis for a causal explanation of what we observed. The most basic manifestation of this tendency is termed "post hoc ergo propter hoc," which means because one event preceded another, the preceding event was the cause. For example, if the police budget goes up [or down] and the crime rate then goes down [or up], people might conclude that the change in the police budget was the cause. Perhaps the budget change had something to do with it, but there are many possible causes of crime, so it is also possible that the budget change had nothing to do with...