The information here should at least help you become more aware as you allow statistics and other kinds of data to sink into your brain. It may also prevent you from getting scammed or being misled into purchasing something that’s not as great as it seemed.
We’ve all heard about the rise of “fake news,” but what about false or fraudulent statistical data?
Many people see seemingly reputable research papers or graphs from apparently worthy sources and assume the data is correct and wholly true — but that’s not always the case.
Continue reading to learn about several indicators that the data you’ve found online could be false or fraudulent.
1. Biased sponsorships
Before you get deep into online data, always check the fine print. If the study was sponsored by a group or company that could achieve financial gain from the results, take it with a grain of salt. These kinds of research projects that include potentially biased sponsors may bring skewed results.
Biased sponsorships are especially common in the medical industry when particular sponsors pay significant amounts of money to facilitate the research. It is often difficult for medical researchers to secure required funding, but there’s evidence that when health industry representatives sponsor drug or device studies, the results are more likely to favor those sponsors.
2. Small sample sizes
Some data comes from very small sample sizes, and the researchers involved don’t bother to make that crucial fact clear. Small sample sizes might make it hard to reproduce the same results again in similar settings, thus providing a skewed impression about the importance of the data in question.
If you saw a television commercial boasting that four out of five survey respondents said they preferred a new brand of shampoo instead of what they were using before, you might be tempted to run out to your nearest supermarket and pick up a bottle. But, what if a flash of tiny text at the bottom of your TV screen revealed the sample size of survey respondents consisted of only 50 people?
The shampoo may still be a potentially good buy, but the statistics aren’t as amazing if you learn so few people took part in the study. Some research experts recommend dealing with small sample sizes by incorporating results from previous trials of the same product into the most recent results.
3. Material that was potentially seized in a data leak and manipulated
Fraudulent data is becoming so prevalent that University of Washington instructors are now offering a course in how to spot it, which may someday be available to everyone online.
What’s also becoming more common in our society? Data leaks. There are many things organizations can and should do to stop information from being compromised in a data leak, especially if they are prone to high-profile hacks.
As a consumer of information, you owe it to yourself to dig deep into available resources and find out if the publisher of a given study has been in the news lately due to a recent hacking incident. If it has, there’s a chance that information has fallen into the wrong hands and been changed by hackers for their own benefit.
4. Data that indicates very high rewards for investors
Fake data can also cause people to become victims of investment scams, especially if they’re studying the stock market and deciding which companies deserve their attention as they buy stocks.
One of the most popular scams is what’s known as the “pump and dump.” In this scenario, criminals buy lots of stocks associated with a relatively obscure company, then start flooding the Internet with false press releases or blog posts about how that business is just about to make a major breakthrough or do something else that’ll make stock prices rise.
Once the stock prices reach their peak, the perpetrators sell the stocks for hefty profits. That makes the stock prices plummet and means all fellow investors lose money quickly. It’s best to study investment trends over a prolonged period and make sure the data you see matches up with supplementary research. If something promises extremely high returns, it may be too good to be true.
The information here should at least help you become more aware as you allow statistics and other kinds of data to sink into your brain.
It may also prevent you from getting scammed or being misled into purchasing something that’s not as great as it seemed.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.