How Journalists Who Probably Majored in Journalism, Not Business, Report “News”

Barclay’s sponsors a survey of over 2,000 wealthy individuals. Reporters seize on one finding: 47% of the Chinese respondents say they want to move abroad in the next five years.

Here are the headlines:

Almost Half of Wealthy Chinese Want to Leave, Study Shows

Almost Half of China’s Rich Want to Emigrate

Half of China’s wealthy want to emigrate within 5 years

Sloppy, sloppy, sloppy.

Adam Minter gets it right:

First, how does Barclays know? ….[T]hey interviewed 2000 high net word [sic] individuals “all of whom had more than $1.5 million in net worth,” and 200 with more than $15 million in net worth. They come from 17 countries, and 750 self-identify as entrepreneurs. Beyond that we know nothing, but I think it’s safe to assume – based on this information – that the sample taken was not representative of Chinese millionaires as a whole (the sample size would be too small). Rather, it’s representative of Chinese millionaires who don’t mind responding to surveys from investment bankers.

And that’s not all. The report itself doesn’t say “half of wealthy Chinese want to leave.” The conclusions from the survey are more about increasing mobility of wealthy people everywhere. It rarely singles out China, When it does, China is simply in a group of countries where the immigration of the wealthy is more likely:

Over the next five years, those in China, Qatar and Latin America are most likely to be planning a move, while high net worth individuals in Switzerland, India, Saudi Arabia and the U.S. are most likely to remain where they are.

I would add that owning a 3-bedroom apartment in Beijing or Shanghai by itself would put many Chinese people in the category of “more than $1.5 million in net worth.” These respondents are not necessarily China’s “wealthy;” they could be, simply, a hundred or so Chinese who own a decent-sized apartment.

None of the reporters say how big the sample of Chinese respondents was. No one knows why they want to move, or for how long, though some of the reporters trot out the usual guesses (education, social benefits) despite the fact that the report itself says 35% of respondents want to immigrate for a “better climate!”

The WJS blog is particularly sloppy:

But for all those money drain, China is also on the receiving end: It’s a top destination for Singapore’s high net-worth individuals, with 30% saying they want to move to the Middle Kingdom.

Huh? Were we talking about “all those money drain”? A lot of Chinese wealth is held in property and capital stock, and is unlikely to move abroad with its owner.

And why the “but” as if we should be surprised that people both want to move from and to China? Would anyone write a sentence like this: “But for all the U.S. foreign direct investment, there are also foreigners who want to invest in the U.S.”? What’s next, a dog-bites-man story?

A Possible First for Africa

As many of my students are from Africa, and even quite a few from Zambia, I couldn’t help but notice this:

Under the Zambian constitution, if Mr Sata becomes unfit to work he will be replaced by his vice-president, Guy Scott, pending a new election to be held within 90 days. If so, Mr Scott would be the first white man to head an African state since the end of apartheid in South Africa two decades ago. What is more remarkable is that few Zambians seem concerned—a marked contrast from neighbouring South Africa or Zimbabwe, where politics is still riven by questions of race and colonialism.

Race does have an interesting intersection with economics, especially as it relates to rational behavior and self-interest. People shouldn’t harm their self-interest (say, by not hiring workers who contribute marginal value in excess of their marginal costs) due to acting irrationally (just because they are of another race or ethnicity, but no less productive).

Economists generally prize efficiency. Racism and ethnic prejudice tend to reduce efficiency, by distorting the allocation of resources away from their most productive use.

Here’s hoping the future looks more like Zambia, and the U.S., where race seems less of a barrier to political success than it is in other places.