What would you conclude if I showed you the following graph?
If you know how to read a scatterplot, you’d probably say that changes in the tax rate have no effect on the number of hours worked. If you follow economic policy debates, you might be surprised by this graph because it contradicts a very common belief: Europe is less productive than the U.S. because their taxes are higher.
But I didn’t show you the whole graph. Here’s how it really looks: Continue reading “How to Lie with Statistics”