Crunching the numbers: How new research has revealed the hidden truth behind indexes

PhD student Sherry Zhang's research is revealing the hidden truth behind indexes.

They say numbers never lie.

But Monash Business School PhD student Sherry Zhang knows that’s not the whole story.

“Numbers are supposed to be truthful and impartial, but you still need to distill the truth from the vast sea of data - or at least be able to recognise how an analysis may have concealed the truth behind elaborate figures,” Ms Zhang said.

“Having the ability to analyse data allows you to make your own judgment in the digital world.”

She said her research aimed to make it easier to zero in on the facts when interpreting indexes.

The vast impact of indexes

“Indexes are everywhere around us, from informing us about drought and climate change to ranking nations by human development and gender gaps, but often questions arise when we see those numbers and rankings,” she said.

“For example, if you see one country has a Gender Gap Index of 0.7 and another one has a gap of 0.75, the natural questions might be ‘How close are these two countries in gender equality progress?’ or ‘What would happen if we increased the weight of one indicator, like education?’.”

To solve the puzzle, Ms Zhang has created software tools and a methodology that shows how indexes behave under different data conditions.

“We’ve developed a data pipeline that standardises the steps used to build indexes so that they can all be built from the same set of components,” she said.

“This is particularly important because researchers and policy-makers often have their own favourite indexes, but it is generally difficult to verify and compare them against other indexes.”

Open-source software opens index standardisation to the world

Ms Zhang’s supervisor, Professor Dianne Cook, said her open-source software would allow indexes around the world to be defined using the same small set of building blocks.

“It will also allow developers and users to play ‘what-ifs’ to learn how decisions might be affected if something in the index definition is changed, or different data is recorded,” Prof. Cook said.

“We hope this approach will be broadly adopted to provide more transparency with widely used decision-making tools.”

The unique thrill of research discovery

Ms Zhang said for her, research was about the thrill of discovery. “I enjoy the ‘A-ha!’ moment when you figure something out,” she said.

“Doing research is a bit like playing in the backyard when you’re a child - the moment you find something surprising, you want to rush back inside and share it with everyone.”

Ms Zhang said after eight years in Monash Business School’s “hugely supportive” Department of Econometrics and Business Statistics, she was looking forward to new challenges next year.

“I’m joining the Department of Statistics and Data Sciences at the University of Texas, Austin as a postdoctoral research fellow,” she said.

“I'm excited to see how the next chapter of my research journey will unfold and where it will take me.”