A study says that a black is 60% more likely to get turned down for a bank loan in Boston than a white.

Here are the flaws in the report:

The report said that blacks were turned down 17% of time while whites were turned down just 11% when the same criteria was used. The grand 60% number is the percentage difference between 17% and 11%. One could have more truthfully said that the black applicant was 6% more likely to be turned down.

The fact that the rejection RATE is 60% higher does not mean that there are 60% more rejections. This is a classsic method for using statistics to mislead.

There were other variables that affected the loan application success rate such as assset or collateral base, job history, education, etc.

All of the remaining difference was traceable to just one bank – and that bank was black owned.

Lesson: Be very suspicious of grand statistics when used for political purposes. Get the whole story.

Summarized from Economic Facts and Fallacies by Thomas Sowell