Posts Tagged ‘statistics’

More Brexit planning assumptions

December 21, 2018

Man looks at unicorn and remains unconvinced

We have been asked for some further planning assumptions to go with the original set.  These are given below.

Asset prices

The optimistic assumption would be that Brexit does not happen or happens in a way that is not harmful so some of the correction is recovered from what had been priced in on that account.  So say a loss of 10%.  And the middle option would be 20%.

Investment performance

The most optimistic figure that has been canvassed is 3.5%, but this is surely too optimistic in the circumstances.  Say 3%, with a middle figure of 2%.


The question here is really what the difference between inflation and interest rates will be.  The BoE forecasts suggest a real interest rate of around -2%, as at present.  To be more scientific, real interest rates are currently something like -1.75% (0.75% Bank Rate – 2.5% inflation).  The BoE forecasts tend to imply a real interest rate of about -2%, but it would depend on how the rate was adjusted to counter inflation.  Say -2.5%/-2%/-1.5% for pessimistic/middle/optimistic.

As for inflation itself, the optimistic forecast would be that MPC manages to hold inflation to say 2.5% over the period, giving overall inflation of 13%.  So we take 22% as the middle point.

CS Pension

There seems to be no room for variation here.

State Pension

If one assumes 2.5 % inflation then the only room for growth even under the ‘triple lock’ would be if earnings rose faster than inflation.  The latest ONS figures show essentially no real growth in earnings over the period from 2005 (!), so one cannot expect any real increase there either.

Tax rates and allowances

Hard to see any room for giveaways here!

> 60 concessions

Too make things easy for ourselves, we assume that in the optimistic case these survive for the next 5 years, while in the middle case half of them do.


Table of assumptions (unless otherwise stated in real terms and for period 2019-20 to 2024-25)


The pessimistic scenario reflects a coherent view of unmediated Brexit plus asset price correction while the optimistic scenario also reflects a coherent (but unlikely) outcome where Brexit is rendered harmless.  It is hard to give such a definite interpretation to the middle scenario and as such it should be treated with caution.

The treatment of tax and pension changes  as proxied by >60 concessions is very likely insufficient–at the very least, one could consider allowances as being constant in nominal terms, thus reducing in real terms.

The present treatment also implicitly assumes that things remain as they are for the remainder of 2018-19, which is certainly open to challenge.

Planning assumptions for Brexit and after

December 17, 2018


Having grown tired of insomnia, our client has now fled the Civil Service and hopes to avoid starvation by a combination of his investments in bonds and equities, a Civil Service Pension (soon) and a State Pension (not so soon).

He writes:

Meanwhile, I need to make some concrete plans without knowing exactly what is going to happen around Brexit and indeed asset price correction generally. I would like some planning assumptions–the idea is to give a solid basis for planning on the basis that things should not realistically be worse than this.

Our advice is as set out above.  We draw on on the Bank of England forecasts.  These have been criticised on the grounds that:

i)  they take no account of any policy response;

ii)  they are phenomenological, based on observed correlations more than causal modelling.

The point about a policy response is that it can spread the effect out to different times or different people but cannot in general create value from nothing.  So this is really a question of distributional effects–who gets how much of the pain and when–rather than the quantum.

As for correlations, there are times when you need to produce numbers and don’t have time to model the economic universe in detail.  The effect size claimed is similar to that of the credit crunch of 2007/08, which is the nearest–if hardly most similar–comparator.

In summary, our advice would be to look not so much towards the destruction of value (something between significant and staggering) to be expected over the next year but at the effect changed circumstances might have on the revaluation of pensions.

Taking a rather more short-term view focused on the immediate future, our client says:

Applying this set of assumptions to my circumstances, I come to the conclusion that I would lose money that I can afford to lose, which is irritating but no worse than that.

There’s nothing like a satisfied client!  But we can hardly say we have always been in the Brexit loop.  On our first encounter, we took three days to work out what it was, and a further two to decide it could hardly happen.

This analysis has now been extended here.

Conversation Exchange, use and abuse

November 21, 2018


Once my Conversation Exchange partner Kseniya (from the provincial town of X, well-known in 19th century literature) and I discussed the proper use of that resource.

I suggested that you should be clear from the beginning what you were looking to get out of the exchange and what exactly you could offer in return.

I said that it was useful to have defined topics of conversation to avoid either having the same conversation time after time or getting into details of one’s life, thoughts and feelings that one would not necessarily want to share with a stranger or chance acquaintance. I also said that you needed either a reasonable level of the target language (I think that the site used to say that you needed Upper Intermediate for conversation to be any good–compare the definitions) or a degree of linguistic sophistication so as to make use of material you didn’t necessarily understand immediately.

Since then, it  has occurred to me that it is probably also a good idea to explicitly split the time so that half of it is spent in language A and half in language B.  There is always a tendency to drift into chatting in the language of the stronger learner (let’s say it’s language A), which of course minimises overall effort but then not speaking to foreigners at all reduces it still further.  So you should have discussion of points in language B and correction of mistakes in language B in language B, to avoid getting into language A as a lingua franca.

Kseniya felt that these points were of frightening irrelevance. Her thoughts were that it was very difficult to find an English speaker who wanted to practise Russian and many of those you did find were in fact just looking for a woman.

I said that there were plenty of sites for that and these days you could surely speak to your intended via Skype on one of those. She had asked one of her undesired contacts about this and he had said that all the women there were crazy. I also said that she could look for female conversation partners, but they were apparently likely to want to talk about clothes and cosmetics.

She asked me why such men were looking for women particularly from Russia or Ukraine.  I said that since I wasn’t one of them I didn’t really know.

Anyway, the aim of the present study is to see whether there is evidence of men looking to use CE specifically to make contact with women from Russia/Ukraine (that is, Russian speakers) rather than to enhance their language skills.

The hypotheses to be tested as indicators of this behaviour were:
i) There is an excess of M over F for ENG->RUS;
ii) This surplus is more marked below Upper Intermediate;
iii) This excess is greater for ENG->RUS than for comparator languages.

Here by ENG->RUS and so on we mean English speakers seeking to exchange with Russian speakers.  From the data at we take Portuguese, Italian, Turkish and Japanese as comparators, because they seem to be languages of similar importance and popularity to Russian among English speakers and also to avoid excessive labour in counting instances.

We give some results below.  (Data was collected on 18/19 November 2018.)


ENG-RUS via chat M F
Beginner 1205 219
Elementary 276 52
Pre-intermediate 160 41
Intermediate 153 35
Upper intermediate 65 13
Advanced 40 15
Proficient 11 2
TOTAL 1910 377

A comparison of males and females as in Table 1 above certainly showed an excess of males, which is strange in view of the belief that the vast majority of students of modern languages in English-speaking countries are female.  However, this anomalous pattern was repeated for the other languages considered, for instance Italian as in Table 2 below:


ENG-ITA via chat M F
Beginner 675 570
Elementary 332 249
Pre-intermediate 265 154
Intermediate 264 173
Upper intermediate 125 66
Advanced 82 44
Proficient 26 9
TOTAL 1769 1265

Now then, Italian is really only spoken in Italy and Switzerland, so it is hard to see the excess men here all looking for an exploitative relationship with a woman from a poor country.

We can also see from the data above that a great many of the users of CE do not claim to be at a level to make use of it effectively.  But we can compare the difference in the percentage of M and F declaring themselves to be below Upper Intermediate level.  For instance, with regard to those seeking Russian speakers (Table 1), 93.93 % of men assign themselves to a level below UI as opposed to 92.04% of women, a difference of +1.88%, indicating that the men report themselves as less linguistically advanced than the women.  Similarly, the ratio of M to F here is 5.07.

Table 3 below shows these indicators for English speakers seeking the languages indicated:


ITA 1.40 -3.76
POR 2.87 -4.71
RUS 5.07 1.88
TUR 2.12 -6.81
JAP 2.23 -2.03

These results are illustrated in Figure 1 above.  We see that by comparison with the other languages considered, those seeking Russian are marked by a large number of men relative to women and a large number of these men assigning themselves to lower levels of proficiency.

To summarise:  this study provides support to the hypothesis that such men were looking for women particularly from Russia or Ukraine.

What is this nonsense?

November 19, 2017


Following our earlier discussion, the BBC has published an article on the financial benefits of a university education, with some results as shown above.  But it’s difficult to know what to make of it, since they don’t say anything about data or methodology or (perhaps more realistically) give a link to where these questions might be covered.

Questions which are not answered include what data are they using, what years are they covering, what is the definition of these subjects, what students are they covering.

What data are they using?

The real question is income data.  If it comes from self-report, then you will get low coverage and also inaccurate answers.  If it’s HMRC data, then you might also get some regrettable inaccuracies and omissions and you will miss foreign students and UK students who went abroad after graduation.  There’s also a question about what coverage you get of UK students who don’t take out student loans.  The work is ascribed to Dr Jack Britton from the IFS and there is a recent IFS study that covers similar ground.  Perhaps it’s the same data…the same years…whatever.

What years are they covering?

Search me.

What is the definition of these subjects?

It is hard (for me at least) to work out the coverage of Medicine & Dentistry, Nursing, and All Medicine.  I suppose that All Medicine does not enter into combined, but you never know.  Then you could ask whether Languages is just Modern Foreign Languages, or does it include Classics, Welsh, Irish, Linguistics…and so on…

What students are they covering?

At a guess, it might be UK-based students who have done first degrees at UK universities and who can be followed up.  But then in some subject areas many of them will have done higher degrees and a PhD would probably depress earnings at the 5-year mark.


Finally, the figure above is interesting for its inclusion of the Open University, whose students may well be different on entry and retired on exit…

Indeed accounting for the value of languages

October 6, 2017

Data as at 2240 on 6 October

So we continue our previous attempts to find some value in foreign languages with the help of Indeed.  We say that the typical undifferentiated graduate may well end up as an accountant, and ask what value may be added if they know a foreign language.  This approach also has the advantage that ‘accountant’ actually means something (unlike ‘consultant’) and it means something outside the UK (unlike ‘solicitor’).


Accountant salaries, with and without languages

The table above shows results for numbers of jobs and average pay, where ‘German’ means postings that mention both ‘Accountant’ and ‘German’ and so on.

We see that:

i) a rather small proportion of the accountant jobs mention languages (about 4% for the languages mentioned here);

ii)  for some languages–Arabic, Turkish–accountant jobs are scarce;

iii)  as previously,  Dutch, German and Spanish are worth money;

iv)  as previously,  Polish and Japanese are not worth money.

How popular is Russian in the UK?

October 2, 2017


The table above gives the numbers of people studying for examinations at various levels.  The school examination numbers refer to the numbers of entries as given on the JCQ site while the ‘Degree’ figures refer to first-year full-time students doing first degrees, as on the HESA site.  Here, in the ‘Degree’ column, we have assigned all of ‘Russian and East European Studies’ to Russian and all of ‘Modern Middle Eastern Studies’ to Arabic.

The table below gives the same data expressed in terms of ranks.


We see that Russian ranks between 5th and 9th, depending on the particular stage we are looking at.

From a slightly different angle,  British Council report Language Trends 2014 gives the percentage of schools in the state and independent sector where particular languages are taught at any level (including non-examination/extra-curricular) as below:


Taking account of proportion of the total school population in independent schools, we might estimate that about 7% of children attend schools with some provision for Russian.

We can then ask what the position Russian ought to hold. A British Council report on Languages for the Future dating from 2013 gives as below in  terms of importance for Britain:


So Russian may be about as popular as it ought to be.  We will not venture an opinion as to whether the same holds for the popularity of Russia.

Important languages, Indeed!

September 30, 2017

Data for Arabic as at 2240 on 30/09/2017

We try another approach to assessing the relative value of modern foreign languages.  The Indeed site allows one to search for job postings according to particular keywords in a particular location and gives a summary in terms of numbers and estimated salaries as illustrated above.

So we can compare these results postings containing the names of various languages such as ‘Arabic’, ‘German’ and so on in London, using in the first case key languages identified by the British Council as we discussed earlier.  This gives results as below, ordered in terms of average salary, which is just the total estimated salary associated with relevant postings divided by the number of postings.


In this table, ‘Overall here’ combines the 12 languages listed while ‘Overall jobs’ reports on all the jobs returned for London at the time of the study.

There are many interesting points here–there does seem to be some value to Dutch, as pointed out by the British Council.  The results for Mandarin are as ever clouded by what you call the language–‘Chinese’ gives a healthier average salary (£27,395) and rather fewer postings (1879).  The low average salary for Polish is presumably down to the kind of work Poles do in London while ‘Italian’ may be referring to restaurants rather than the language, thus depressing the average salary assigned to the term.  The explanation for Japanese might be that all professional-level jobs are filled by native speakers recruited from Japan, leaving only low-paid roles for others.

In general, we see that about 9% of postings mention one of the British Council’s priority languages, and this will overestimate the number of posts.  If as often happens an advert mentions ‘knowledge of French, German, Italian, Spanish or Portuguese) then it will get counted 5 times.  While there are of course other foreign languages, the representation of foreign languages in the London jobs market can be no more than 10%.

We can tabulate the overall results here with those derived from some other search terms as below:


The two points here are that the intuitive ordering of subjects and academic qualifications is reproduced and that languages seem to add less value than an unspecified degree.

Are languages important?

September 27, 2017

Never mind which languages, the question is are any foreign languages important in the English-speaking world?  After all, if you live in some non-Anglophone country you probably need English both for foreign travel and for doing business with the rest of the world, while for an English-speaker the only real need is when you have to sell stuff to foreigners.  And that’s stuff as in stuff, since the English language may be part of the attraction of services like education.

The CBI Skills Survey for 2017 suggests that employers are not satisfied with graduates’ foreign language skills:


but also do not regard them as particularly important:


…unless of course they come under ‘Degree Subject’…

Available surveys do not really show any particular premium for graduates in foreign languages.  A survey with rather unclear methodology looks at average [mean] starting graduate salaries as at October 2016, with some results we have summarised:


So it appears that starting salaries for what appear to be language-based degrees are a little above the average for humanities and a little below the overall average.  By way of comparison, the highest and lowest salaries are shown below:


A more systematic exercise (but with less detailed subject classifications) published by DfE gives median earnings in 2014/15 for those graduating in 2008/09.  As before, we would be hard-pressed to claim a particular premium for Languages:


Finally, what looks like a very thorough study by the IFS is more interested in various factors such as socio-economic background, prior attainment and institution status but gives some rather discrepant information for males and females:



So ‘Lang Lit’ (which must be basically English in terms of numbers) looks like a pretty good deal for women but not for men.

We conclude that there is no real excess demand for graduates in modern foreign languages demonstrated by either employer preferences or salaries achieved…

Teaching important languages

September 26, 2017

British Council ordering

As we have seen, the British Council report Languages for the Future gives a priority ordering of languages as above.

The question then is how this matches up with what is actually taught.  A further British Council report Language Trends 2014 gives the percentage of schools in the state and independent sector where particular languages are taught.


Languages taught in state schools


Languages taught in independent schools

We see that there is no particular sign of Arabic becoming widespread, nor even of Chinese doing so(though that is more common). We presume that ‘Arabic’ is Modern Standard Arabic in all cases and that ‘Chinese’ is Mandarin unless otherwise stated.

We can also look at the numbers of people studying for examinations at various levels.


Numbers studying for various examinations

Here, the school examination numbers refer to the numbers of entries as given on the JCQ site while the ‘Degree’ figures refer to first-year full-time students doing first degrees, as on the HESA site.  Here, in the ‘Degree’ column, we have assigned all of ‘Russian and East European Studies’ to Russian and all of ‘Modern Middle Eastern Studies’ to Arabic.

We can try putting these various activities on a common footing by giving them a weighting based on the amount of time in years they take up (taking account of subsidiary languages/subjects for the Degree column).


Table of weightings

We would then like to compare the input for various languages with their importance according to the British Council report.  There is no obvious common unit of measurement between these two things, so it seems safest just to compare the rank of the languages according to these two measures. The table below refers.


Comparison of importance according to British Council with resource input, by ranks

On this crude basis, Arabic (especially), Portuguese and Turkish are under-provided, while Polish (heritage speakers) and the traditionally-taught languages French and German may be relatively over-provided, along with Italian.

But if you were just interested in studying languages and wanted to know which ones would be most profitable, the obvious course would be to do Spanish at school–which seems quite possible these days–and then Spanish & Portuguese at university..

Which foreign languages are most useful?

September 25, 2017


The picture above (from the WEF site) gives one answer in terms of the most influential languages as reflected by book translations.  There seem to be definite nodes at English, French and Russian, then less clear ones at Dutch, German and Chinese.  But it is hard to give an exact interpretation of this figure, or indeed the other ones displayed at the same place.

Otherwise, the Internet reveals a number of attempts at weighting-and-ranking:


A British Council report on Languages for the Future dating from 2013 takes account of 1. current UK export trade 2. the language needs of UK business 3. UK government trade priorities 4. emerging high growth markets 5. diplomatic and security priorities 6. the public’s language interests 7. outward visitor destinations 8. UK government’s International Education Strategy priorities 9. levels of English proficiency in other countries 10. the prevalence of different languages on the internet and their table of English proficiency by country is quite interesting:


From the point of view of importance to Britain, they give a ranking of:


This may well be the answer from the British perspective!


A further study (2016) from the WEF considers languages under the criteria of 1. Geography: The ability to travel 2. Economy: The ability to participate in an economy 3. Communication: The ability to engage in dialogue 4. Knowledge and media: The ability to consume knowledge and media 5. Diplomacy: The ability to engage in international relations and comes up with the following results:



List25 gives a list of the world’s 25 most influential languages as of 2014, where the rankings are not just done according to how many people speak the language. Of course this is taken into consideration but so is how many people speak it as a second language, its impact on global commerce and trade, and its lingua franca status around the world.

They have some nice maps, for instance for French:


and come up with a ranking of 1. English 2. French 3. Spanish 4. Arabic 5. Mandarin 6. Russian 7. Portuguese 8. German 9. Japanese 10. Hindustani (Hindi/Urdu) 11.  Malay…


Meanwhile, the CBI Skills Survey for 2017 gives the following:


So, English is clearly the most important/useful/influential language of all times and peoples, and we will set it aside in what follows.

Using the British Council rankings as a starting point, we can summarise the results as below, where languages outside the British Council list are ranked by number of occurrences and then average ranking where listed:


Or we can apply the same procedure for all of the languages that occur more than once without privileging the British Council rankings, so that we rank first by number of occurrences and then average ranking where listed:


So, the world’s second most important language might be French, Spanish or Mandarin.  In fact, the top 5 for the British Council and the combined ranking have the same laguages, if not quite in the same order:  French, Spanish and German (the languages most widely taught in British schools) together with Mandarin and Arabic (rarer and more challenging, one might say).