, Columnist
The World's Most Important Graph Heads to the Graveyard
A simple visualization of shifting global income turns out to be wrong.
If you squint you can see it.
Photographer: AAMIR QURESHI/AFP/getty imagesThis article is for subscribers only.
Most human beings suffer from what psychologists call confirmation bias. When we hear a story that we already believe is true, we trust the storyteller even more. In the age of big data, the story often comes in the form of a graph. And so it is that most of us in the economics profession and financial press find ourselves with egg on our faces. The so-called Elephant Graph, which many of us had labeled the most important in the world, probably doesn’t show what it claims to.
The graph, made by development economist Branko Milanovic, shows how the income levels that define the percentiles of worldwide income distribution have changed since globalization kicked into high gear in about 1980: