All Terrain Thinking

A Compendium of things I think are Important

Economics: It's not just whats' in your wallet

Now we have looked at the When, which, and What questions and it is time to move on to the How question. Once we have decided on the data, we need to decide on how to present it. The tool we will use will be Excel, but there are many other products on the market which would allow you to generate professional quality tables and graphs. But how do you decide if you should use a table or a graph? To answer this you need to address a basic question-what are you attempting to achieve when presenting the data? To see the differences between the two, let's return one last time to our Slippery Slope example and compare a tabular and graphic representation of the data.

The advantages of the Table is that we can determine the actual revenue figures for each year, something that is not possible given the graph. For example, if you needed to know revenue in 1992, you would want to use a table. The graph, on the other hand, has the advantage of a visual representation of any relationship between the variables in the table. Although the growth in revenues is 'contained' in both the table and the graph, it is far more obvious in the graph and if it was your intent to convey the growth, the graph would have been your preferred choice.

If you choose to create a graph, you then have a new question: what type of graph to use? This is not a question to be ignored since the technology allows you to create, almost effortlessly, any graphical representation of the data. As a guide to some of the more common graphs I suggest that you check out a brief discussion of Pie Graphs, Bar/Column Graphs, Scatter Diagrams, and Line Graphs in the next unit. When you get to the graphics section you will find that when you are creating / interpreting graphs, you mustbe aware of two potential problems-the confusion between Correlation and Causality and the potential for Scale distortion.

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