The Toilet Door

Ok, so I installed a math plugin based on LaTeX so I can type equations. The added bonus is I'll get to teach myself how to use them.

The purpose of this is so I can make things look a bit neater. So onto efficiency.

I've been thinking about efficiency my entire life, always applying it to various tasks, like driving, working, walking, eating, exercise. The problem is, that there's so many ways to define it. The most common and general definition is

Where maximum output is defined as some maximum achievable quantity. The energy efficiency of an engine say could be

So naturally, I strive to be efficient in most things I do. When I spend money, I calculate the dollar per hour entertainment value for purchases, I evaluate the efficiency of my work output and spending.

So relating this to the main point, is that governments and oppositions always claim to be able to increase the efficiency of the public service and cut costs. Now I'm sure everyone has their own horror stories about how inefficient their visit to Centrelink or Medicare was, but on the whole, these organisations have been streamlined quite a lot. It's not usually the end of line workers that are terribly inefficient anyway. So how do we define efficiency for government spending?

Obviously, everyone wants their tax dollars to be spent well and not wasted, but where it gets interesting is that these people themselves are probably no more efficient than the government when it comes to spending. Take for example, a bottle of shampoo. Suppose it costs $10 and is a generous 1 litre volume. That gives a cost of 1 cent per mL. Now, most people have trouble getting the last few bits out of the shampoo bottle. There might be 10 or 20 mLs leftover that are just too difficult to extract, it's possible to do it but the time it takes is not worth it, so we accept  some waste. The efficiency in this case is about 99.8% which is a high number. Food wastage is probably much lower, on every plate there might be 5% left, or if you get too full you can often leave about 10 to 50% of a meal. Sometimes it might be saved and eaten again later, but it could be thrown out. A mobile phone contract that includes some dollar value of free calls and messages, many people would not extract full value or efficiency out of that as well.

The point I'm trying to illustrate, is that people are inefficient, there's nothing wrong with that. It's just there's a lack of realisation that the government is made up from people too, so all these inefficiencies add up. So next time someone complains about government wastage, point out that they probably equally waste on the same scale food, shampoo, consumables etc.

So there's an election due in September and this means that both major political parties are starting to have some 'serious' debate about the state of the economy, debt, policies and so forth. One thing that I've noticed is the way all parties use numbers as talking points as metrics for success or failure.

A hypothetical example would be, "We've created 150,000 jobs and unemployment has dropped to 5.2%". At face value this seems like a good statement to make, but the more I think about it, the more it seems meaningless. Creating jobs is obviously a good thing but it's the numbers they throw around in a debate that concerns me. What does creating 150,000 jobs mean? Did the public service grow by 150,000? Are the jobs in industries or fields we should be investing in or pulling out of? Are they full time jobs or is this casual work? Similarly with the unemployment rate dropping to 5.2%, what was it before? What is the underemployment rate?

These are all questions I'm thinking of when I hear someone mention something with numbers, what do those numbers really mean in the larger context of everything else. Now obviously numbers are important, having any metrics, even flawed ones are better than having no metrics, part of the issue I realise now is that people don't really understand numbers.

A study was performed testing if people would behave differently for a reward if it was $3 or 300 cents. The results, surprisingly indicated that some people preferred 300 cents. Even if  cents and dollars were switched around, people were more easily swayed by the larger number.

This knowledge has some interesting consequences for looking at political discourse. Are the politicians aware of this effect and use it to mislead or confuse citizens about the state of things? It's possible, there's limited time in media segments to accurately and adequately describe what a number truly represents, it's probably more important that the reader or viewer simply remembers that it was 150,000 jobs created or that a policy will cost $94 billion.

Speaking of policy costs, it's interesting to observe that the cost of everything is often put in vacuum. $94 billion sounds like a lot and it rightly is for an individual to own, but in the context of an entire country that has a yearly GDP in the order of $1.5 trillion ($1500 billion), it doesn't seem as large, it'll seem even smaller if instead of stating the total cost over 10 years and comparing to a yearly GDP, we state the yearly cost $9.4 billion.

I'm going to keep an eye on how it progresses and see if there's a correlation between the way the numbers are presented and how they are meant to be viewed. Obviously positive achievements would be promoted and negative achievements downplayed.