Math Tools for Journalists Ch. 5-8

Polls and Surveys

Polls and surveys can be very useful for providing readers with a view of the public opinion about something, but often these polls are skewed. So it is very important that journalists are careful to check the validity of the survey, as well as provide the readers with as much information about the survey as possible.

Information about polls journalists should always consider:

Information about who conducted the poll

Information about who paid for the poll

When and how the poll was conducted

How questions were worded, and whether or not it encouraged a particular viewpoint

The size of the sample

How the sample was selected

The margin of error

Any exterior events or conditions that may have an impact on the results

A poll can never be conducted of an entire population, so the selection of the sample is important to consider. Random selection is the most reliable type, because it means that every person in the population has an equal opportunity to be selected.

There are different types of ways to select samples:

Census, universe, or population sampling: sampling everyone in the population

Cluster sampling: sampling in one area or region

Multistage sampling: sampling sub-groups within sub-groups within a specific area or region

Systematic random sampling: selecting a number n, and polling every nth person

Quota sampling: select the sample based on demographic characteristics

Probability sampling: randomly selecting a designated percentage from all potential subjects

The margin of error and confidence level are important in translating poll results. The margin of error tells the degree of accuracy of research based on standard norms. It is a percentage based on the size of a randomly selected sample. The larger the sample, the smaller the possible error, so the smaller the margin of error. The margin of error can be determined by charts determined by statisticians.

The confidence level is complicated, but is important to reporting. Confidence level is the percentage of confidence researchers have in the results of their research. It is determined in advance, and is closely related to the margin of error.

The U.S. usually conducts a census to create congressional districts relatively equal in population. It is sent to every household in the country, but the return rate is not as high.

When this happens, figures must be manipulated to make up for the surveys that weren’t returned, resulting in adjusted figures.

Z and t scores are another element a reporter must understand. A z score shows how much a specific figure differs from the mean in order to make it easier to compare figures. The t score is used for small sample sizes.

Business

When reporting business, dealing with numbers is inevitable. But there are different situations in which statistics and numbers are more common.

Financial statements are used to update shareholders, regulatory agencies and other stakeholders about a company’s performance. It usually includes a profit and loss report and a balance sheet.

The profit and loss statement shows whether or not a company is making money. The net profit is calculated by subtracting expenses from income.

A balance sheet tells a company’s assets, liabilities and equity. For this, assets= liabilities + equity. Thus, the company’s assets (everything they own) equals liabilities (money the company owes) plus the equity (what the company is really worth).

Stocks and Bonds

Stocks and bonds are used by businesses to raise money, and it is important for journalists to report accurately on this.

When people buy stocks, it is an investment, and they become owners of tiny portions the company. A company’s stock’s value varies depending on the demand and business conditions.

Mutual fund companies sell shares, then use that money to invest in stock from other companies.

Bonds are sold by companies and governments as a loan from an investor to that company or government. They earn interest at a set rate and are low-risk investments. If owners wait until the bond matures, they receive the face value of the bond. This is often the amount the original buy pays for it.

To determine a bond’s “current yield,” or return on the investment,” use the formula: current yield = (interest rate x face value)/price.

Many bonds are tax exempt when they come from governments, so the return may be more from those. Also, the formula above doesn’t take into account reinvestment.

Reporters may be more interested in the bond cost though, and the formula for that is: bond cost (interest) = amount x rate x years.

Market averages are used to measure action on the exchanges, while stock indexes give an overall picture of market conditions.

The Dow Jones Industrial Average is one people are hearing about constantly. This is the total value of one share of each of 30 select stocks divided by a figure called the divisor. This number is used to show how the entire stock market is doing.

NASDAQ, the National Association of Securities Dealers Automated Quotations, is an automated quotation system that gives information about domestic stocks and bonds that aren’t listed on the regular stock markets.

Property Taxes

Property taxes are the largest source of income for local government, school districts and other municipal organizations. The property tax rate is generally decided depending on how much money the organization needs, and then dividing that among property owners. Owners pay a certain amount based on the value of their property (generally real estate, but sometimes includes other valuable assets).

Property taxes are usually applied to homes’ assessed valuations, not the actual prices they would sell for on the market. Reappraisal is important to update so that it reflects the current market value.

Appraisal value is based on the property’s use, certain characteristics (location, square footage, number of stories, exterior wall type, age, quality of construction and amenities), current market conditions and a visual inspection by trained appraisers.

Often property will be taxed by more than one organization – city, county, etc. Property may also be taxed with a different percentage used to calculate the assessed value.

The mill levy = taxes to be collected by the government body/assessed valuation of all property in the taxing district. This is then applied to assessed valuations. Assessed value= appraisal value x rate.

Each municipality figures its taxes differently based on local policies, so journalists should be sure to check before reporting about them.

To figure out the tax owed, divide the assessed value of the property by $100. Then multiply that by the tax rate.

Practice

1. If 200 Elon students were polled about who they voted for in the election, and 54 percent said Obama, is it appropriate to say that Obama won Elon’s vote?

2. A hot dog vendor earns $600 in one day. His cart is already paid for, but the food and wrappers cost $300, and he had to pay $25 to park his cart for the day. What was his net profit for the day?

3. Emily bought a $1,000 bond for $850 with a 4 percent interest rate. What is her current yield?

4. Elon issued $3 million worth of 5 year bonds, with 5 percent coupon, to pay for the new library. How much wil Elon pay in interest over the life of the bonds?

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