Large Sales to Governmental End Users Can Distort Statistics for Individual Countries
Last month, we looked at the difficulty analysts of U.S. export data encounter when trying to identify military exports. As discussed, data in certain categories, such as pistols, do not differentiate between civilian and military exports, making it hard to identify the military component.
The same shortcoming in the way data is collected makes it hard to identify the civilian component of exports in the categories that include both military and civilian exports. But it is easier to miss what is going on if you are looking for trends in exports for civilian purposes. The reason is that analysts of military exports know to look for “lumpy” statistics in individual categories like pistols and ammunition for rifles and handguns – disproportionate bulges in one year relative to the preceding and subsequent year.
Unlike analysts of military exports, who know to look at individual product categories, a casual reader of export statistics is more likely to look at bottom-line numbers. We’re all trained to look at the summary lines in documents, after all, to take in key information quickly. But be careful. Don’t jump to conclusions.
Take a look at Thailand, for example. A quick glance at the bottom line in Table 1 suggests a booming market for American firearms and related products.
Analysis of the detail, however, leads to different conclusions.
Table 2 highlights seven cells with aberrational statistics that totally distort the bottom line. What appeared at first glance to be a very promising trend isn’t a trend at all. In fact, the distortion is so significant during all three years we cover that it isn’t possible to speculate what “normalized” civilian exports to Thailand are without analyzing a longer period of time.
So, this month’s message is a simple one – never form conclusions based only on the bottom-line numbers in our reports. Always look for outlier numbers in the detail. When you spot them, the chances are good that they will change the conclusions you draw from the bottom line.