Government Statistics and Raising A Child – How Not to Read the Data

             We got the call we have been hoping for from our daughter the other day. She said, dad, we have a foster child. Our daughter and son-in-law have passed all the tests and done all the preparation to be foster parents. They have been looking forward to the opportunity with excitement and some concern. Our daughter could have said, dad we have a foster child, now what do we do? But they didn’t. It is a little interesting because they were expecting an older child and instead have an 18 month old. A little different than they were expecting but we are all pleased and so are they. I have been thinking about raising five children (really Margie raised five children and I tried to be helpful and not cause too many problems) and the attendant questions and thoughts I had when first starting out. We are now looking at being empty nesters in just a couple of years.

             So, how did we afford to raise five children? Well, it wasn’t by reading the USDA reports on the cost of raising a child, even back when we started the process. A CNNMoney article titled “Average Cost to Raise a Kid: $241,080” as quoted by Melanie Hicken, August 14, 2013 on money.cnn.com states “From day care to the monthly grocery bill, the cost of raising a child is climbing at a rate that many families can’t keep you with.” The article says that a U.S. Department of Agriculture report released Wednesday (August 14, 2013) says the cost of raising a child from birth to 18 is up 3% from 2011, not including college to as much as $441,100 ($24,505.56/yr). The average cost is $241,080 ($13,393/yr). If we assume each child cost that much (the article doesn’t differentiate between one and several children) then Margie and I would not have been able to afford 5 children during the early years we had all of them at home on my salary.

             The problem with this kind of data and other related and interesting ideas is discussed in a new book I recently picked up by Charles Wheelan titled Naked Statistics Stripping the Dread From the Data. I find his writing informative, entertaining and thought provoking. It sort of reminds me of a book from several years ago titled How to Lie with Statistics by Darrell Huff. The premise of Wheelan’s book is that we need to use statistics correctly and if we do we can gain some important insights into our daily lives and what is happening to us. On the other hand he suggests that there are some statistics that if used incorrectly lead us to very erroneous conclusions or can even kill us. The above article is one of those cases that can lead to some very poor choices. One of Wheelan’s chapters is titled The Importance of Data: “Garbage in, garbage out”, another chapter is titled, Deceptive Description: “He’s got a great personality!” and other true but grossly misleading statements. I think you can see where I am going with these chapters from Wheelan. We need to be particularly careful in just reading the news headlines or even the actual article because the information may very well not give us what we need.

             So, for example, in the above article the discussion didn’t include anything about economies of scale, meaning the 2^nd child doesn’t need all new cloths or need a new bedroom for himself. Both “facts” the government study didn’t seem to take into account. In our case Margie was good at making the money fit the needs. For the record, you don’t need to spend $13,000 / year / child (the average). One article I found more helpful (“Cost to raise a child can be much less than USDA estimate” by Sarah Gilbert, June 14, 2010) suggests costs may be as low as $2,500 / year / child (for 3 children in this article). I think the actual total for each of us may be somewhere in-between. Which also makes sense as all of us do things differently. Again, the above statistics can give us an average but that may not be very helpful. If you are familiar with the Phantom Tollbooth by Norman Juster, in one of his encounters the hero meets the fractional child from the average family. This is kind of like that, the average cost of raising a child is not likely to really give you much helpful or useful information.   

Mark Twain famously remarked that there are three kinds of lies: lies, damned lies, and statistics. I think we could also say something like that about data. There are three types of data: data, damned data, and statistics. That is important to remember whenever you are presented with the “facts”.