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B33rP155 t1_j79rnw8 wrote

This should be in “data is ugly”. There is no trend to this plot.

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Mausy5043 t1_j7clas3 wrote

All data is beautiful.

This one shows there is no correlation whatsoever between the Gini coefficient and the index of econocmic freedom.

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B33rP155 t1_j7cx64a wrote

I agree that all data is beautiful, however data analysis and interpretation can be ugly. Putting a trend line on a plot and interpreting a correlation that doesn’t exist is certainly ugly.

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SteveInMotion t1_j7bputd wrote

Granted the slope m is not very steep, but it would indicate a general trend correlating economic freedom with equality of opportunity, hence lower Gini coefficient.

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Downtown_Gear8588 t1_j7c8ol5 wrote

Correlation does not equal causation.

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SteveInMotion t1_j7cjw51 wrote

Statistically true. In this case you can observe it happening in real life and understand how economic liberty reduces inequality. As Bono said, “I thought that if we just redistributed resources, then we could solve every problem. I now know that’s not true. There’s a funny moment when you realize that as an activist: The off-ramp out of extreme poverty is commerce, it’s entrepreneurial capitalism.”

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Downtown_Gear8588 t1_j7cp262 wrote

I studied development and development economics. The reality is much more complex.

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SteveInMotion t1_j7d3fmu wrote

I’ve lived and worked in so-called developing countries, and, on a more modest scale than Bono, worked on relief efforts. I think Bono is on the right track. And I agree with you that it’s complicated.

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boldjarl t1_j7bu4qs wrote

The r^2 is less than 0.1, there is no trend to see.

Edit: decimal point.

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rfkile t1_j7bwdgk wrote

Unless a relationship is absolutely perfect and there's no noise whatsoever, you'll have an r^(2) less than 1. A value of r^(2) less than 1 doesn't mean "no trend." It just means "there's some fraction of the dependent variable that isn't controlled by the independent variable."

Also worth mentioning that the value OP provided is r (probably the Pearson Correlation Coefficient) rather than r^(2) Coefficient of Determination. While certainly, you can look at the graph and see plainly that the r^(2) is less than 1, it's important to distinguish between r and r^(2)

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boldjarl t1_j7byzef wrote

I meant 0.1. And I squared the r to get r squared.

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SuperTekkers t1_j7b1anz wrote

The concept of applying a linear line of best fit to such a random dataset is really dumb

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Independent-Ad-514 OP t1_j7b7utf wrote

It is not random. There is -0.31 correlation

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Much_Mobile_2224 t1_j7bthqc wrote

An r of 0.31 is an r^2 of 0.096. Having an r^2 less than 0.4 is hard to make an argument you really have anything

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StrangerAttractor t1_j7bt7vr wrote

I could generate really random data, and more often than not get something like this correlation out of it.

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PBlove t1_j7bz0zd wrote

These is a r of 0.8 for black and Hispanic population as a percentage to homicide rate.

Would you accept that as causal?

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deletion-imminent t1_j7ccjov wrote

There can be a correlation without there being a direct causal correlation

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PBlove t1_j7eo71y wrote

Yes. That's what the guy above me is talking about. Because the fitness of the line is low, you likely should not put much stake in a low correlation.

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deletion-imminent t1_j7fkb5a wrote

> Yes. That's what the guy above me is talking about. Because the fitness of the line is low, you likely should not put much stake in a low correlation.

No, these are different. There can be causation with low correlation. But high levels of correlation doesn't necessitate causation.

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Independent-Ad-514 OP t1_j7bzogm wrote

I am not American, but I believe that statistics are important and we should pay attention to them.

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PBlove t1_j7eo3es wrote

So how would you solve the crime issue knowing it's single mother and or racial components?

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rfkile t1_j79f3dn wrote

Just glancing at the figure, it seems like Sudan, Venezuela, and Zimbabwe are outliers. I'm wondering what the correlation coefficient would be if you neglected those.

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Independent-Ad-514 OP t1_j7amp0c wrote

They exist.And their existence on these locations is a fact, We can not ignore facts

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rfkile t1_j7bihe3 wrote

The fact that they exist doesn't mean that their situations are necessarily comparable to those of other countries. There may very well be unique facts that impact your situation. You choosing to include those countries without considering whether there are any special circumstances may itself be ignoring the facts.

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Bewaretheicespiders t1_j79q9b3 wrote

Gini coefficient is absolutely shit as a measure of anything useful, its worth reminding. Its skewed toward small populations and shit economies.

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shang_yang_gang_ t1_j7c7ahe wrote

It is worth pointing out what exactly the "Index of Economic Freedom" is measuring, however. If you take a look at the methodology you will notice many curious things about it - the index includes many measurements of effective governance that are not directly related to what laws or policies are on the books or what people talk about when they typically talk about "economic freedom" (as in to what degree is the government corrupt and to what degree is the government capable of enforcing the laws and policies it has on the books, or to what degree are economic transactions inhibited not necessarily by any formal restriction on it but by the government's inability to secure said transactions). Furthermore, the methodology even goes so far as to simply take economic outcomes that are more or less universally viewed as good and treat their presence as constituting economic freedom - a very specific example would be inflation, where a weighted average rate of inflation over the past three years is factored in to their measurement of economic freedom, meaning that a hypothetical government that engaged in interventionist practices to temper inflation would score higher on economic freedom in regards to this particular metric than a hypothetical government that refrained from engaging in interventionist practices to curb a relatively higher degree of inflation. The Index of Economic Freedom is not just a measurement of this sort of libertarian notion of economic freedom, but to a large extent is just a measurement of effective governance and even just good economic outcomes (as opposed to laws or policies).

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DataMan62 t1_j7ev7u2 wrote

OP: Could you please explain what the Gini coefficient of Income Inequality and the Index of Economic Freedom are?

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_crazyboyhere_ t1_j7bp6c4 wrote

TBH inequality isn't an issue if the poorest person is a millionaire. The issue is if the people on the lower end have a dignified standard of living.

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Independent-Ad-514 OP t1_j7bxilw wrote

Countries with more economic freedom have more economic equality and more wealth

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IkeRoberts t1_j7d3p8r wrote

Where did you get that idea? The data set doesn't provide any support for it.

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Downtown_Gear8588 t1_j7c80sm wrote

This says nothing. Correlation does not equal causation. Not that's there's much Correlation here... what's the p value?

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Moist-Meat-Popsicle t1_j7cyqh5 wrote

Came here to say that. R-squared would be 0.09, then? Without a p-value, it means nothing.

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CrazyMetoFQ t1_j7arihm wrote

Isn't more government control supposed to reduce inequalities

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Common_Cucumber2446 t1_j7blfad wrote

Economic Freedor is not equivalent to goverment control

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Chipofftheoldblock21 t1_j7bmg8m wrote

It’s evidently a big factor however - “Economic Freedom” is pushed by the Heritage Foundation and the Cato Institute, and a big factor is “freedom” from regulation, taxes, etc.

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CrazyMetoFQ t1_j7bpb4u wrote

It is directly proportional

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Common_Cucumber2446 t1_j7dhto6 wrote

Nop, If you check the Economic Freedom Index some items need more government control, like property rights or judicial effectiveness.

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CrazyMetoFQ t1_j7f6icu wrote

I meant stuff like restrictions on business and stuff

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SteveInMotion t1_j7bqlsi wrote

Government often intends to reduce inequalities but the unintended consequences are the opposite. As Bono said: “I thought that if we just redistributed resources, then we could solve every problem. I now know that’s not true. There’s a funny moment when you realize that as an activist: The off-ramp out of extreme poverty is commerce, it’s entrepreneurial capitalism.”

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