From: glevy@PRATT.EDU
Date: Wed Oct 20 2004 - 16:57:09 EDT
> From: Mark Weisbrot <weisbrot@c...> > Date: October 15, 2004 4:02:33 PM EDT > To: weisbrot111@y... > Subject: Econometrics that Matters > > Dear All, > > For those who like econometrics or statistics, here is a simple > problem that is turning out to have significant political > implications. It takes about 20 minutes to read and understand it. For those of you who teach econometrics or statistics, it makes an excellent problem for an introductory class -- an exciting real world > example where the answer to a statistical question has real > consequences. > > Perhaps more importantly, it would be good if some of you would be > willing to weigh in on it. As of now, a paper by two economists (Hausmann and Rigobón, > http://ksghome.harvard.edu/~rhausma/new/blackswan03.pdf ) is being used to undermine the credibility of a very credible election result, > by purporting to show econometric evidence of electronic fraud. Since > this referendum was closely monitored and certified by the Carter Center and the Organization of American States, this paper has also called into question the credibility of the international monitoring > process. > > The election in question is a recall referendum that took place on > August 15 in Venezuela, where the recall effort failed by a vote of 59 > (NO) to 41 (YES) percent. The opposition put forth exit polls, > conducted by opposition activists and supervised by the well-known American polling firm Penn, Schoen, Berland & Associates, that showed > the opposite result: that President Chávez was recalled by a margin of > 59 percent (YES) to 41 percent (NO). (These and other exit poll data > were used by Hausmann and Rigobón in their analysis). > > The econometric model used by H & R is a bit complex (it is explained > in the appendices to their paper), but the problem with their analysis > is actually very simple. Here is a brief outline: > > In this referendum voters expressed their preference (yes or no) with > a touch screen voting machine. The machine then printed out a paper ballot with the voter's choice, which voters deposited in a ballot box. > > Electronic fraud in this system is thus a difficult and risky > enterprise: any rigging of the machines could be caught quite easily > by comparison with the paper ballots at any polling center. In an audit after the vote, the National Electoral Council (CNE), together > with the international observers from the Carter Center and OAS, drew > a sample of 150 polling stations and compared the machine results to > the paper ballots. The results matched almost perfectly -- with 0.1 percent difference -- a number that is statistically insignificant and > easily explainable by the likelihood that some voters might have failed to deposit their paper ballots. > > But Hausmann and Rigobón came up with a theory of fraud that is > consistent with a clean audit. To take their hypothetical example (p.28-30): suppose there are 3,000 voting centers where the machines > are rigged, and the CNE randomly selects the remaining 1,580 centers > to be clean. The electoral authorities then fix the program that randomly selects a sample of 150 centers for auditing, so that the sample is selected from only the 1,580 clean centers. The electronic > results from these centers would then match the paper ballots, and the > audited sample would show the election to be clean. > > The problem with this theory is that under these assumptions, the > audited sample is actually a random sample of the universe of > (pre-vote, pre-fraud) polling stations. It therefore provides > statistical evidence, which Hausmann and Rigobón ignored, of the overall referendum result. And the sample came in very close to the official result: 41.6 of the audited sample voted YES, to recall the > President. A relatively simple statistical test shows that: > > -- The chances of getting an audited sample, under Hausmann and > Rigobón's assumptions of how it was selected, of 41.6 percent YES, if > the true (non-fraudulent) vote were 59 percent YES, are less than one > in 28 billion trillion. > > -- Even if the true vote had the recall barely succeeding with only > 50.1 percent YES, the chances of getting an audited sample of 41.6 percent YES are less than one in a million. > > That should be the end of the story. However, after the Carter Center > responded (see http://www.cartercenter.org/documents/1834.pdf ) to Hausmann and Rigobón, they responded with a new theory of the fraud (see http://ksghome.harvard.edu/~rhausma/new/CarterResponse.pdf pages > 2-3), in which the audited sample might have been not randomly > selected but deliberately selected to be non-representative. In other > words, it could have been chosen to be very pro-government, so that the 41.6 percent YES vote in the sample would match the overall (fraudulent) result. > > However, this would mean that a very pro-government sample was > selected for the audit. But there is no evidence of this; and in fact, > in our paper we looked at the election results from 2000 and found that the people in the audited areas voted the same as the rest of the > country in the 2000 election. In that 2000 election, Chávez received > 61.8 percent of the major-candidate vote in the areas audited for the > 2004 referendum, as opposed to 61.4 percent for the country. This is > well within the margin of sampling error. > > So there is no evidence of electronic fraud and no more reason to > question the results of this election than there is to question that > Ronald Reagan beat Walter Mondale in 1984, by the same margin. > > All of this is explained in our brief paper: > http://www.cepr.net/publications/fraud_venezu_conspiracy.pdf . > > I want to add that this is not a personal or political dispute with > Hausmann and Rigobón. In fact, Professor Rigobón has responded to me > by e-mail and our correspondence has been useful, interesting, and friendly. And we continue to take them at their word that they are not > simply trying to undermine the credibility of the electoral process, > but indeed believe that an electronic fraud may have taken place, and > that their paper provides statistical evidence of such fraud. > Nonetheless I am very sure that they are completely wrong. > > The problem is that, since their paper is a bit complicated, almost > no one has read it and understood it. (Although it has had > considerable influence in the U.S., international, and Latin American > press, and of course also in Venezuela). However it is not necessary > to go through all of their derivations. Some of you may take the time > to read it, as we have, and to figure out how they might have gotten > their result in the absence of electronic fraud. However, their theory > of the fraud -- outlined above -- is explained on page 28-30 (see http://ksghome.harvard.edu/~rhausma/new/blackswan03.pdf ); that, combined with the statistical evidence noted above and presented in our paper, is sufficient to make an informed decision on whether these > allegations of electronic fraud should be taken seriously. Anyone with > a basic knowledge of statistics can easily understand everything here. > > If anyone in interested in looking at this issue, please contact me > by e-mail or at the numbers below. The Carter Center will probably be > reviewing these allegations again, and the controversy will continue, > so anyone who is willing to take a little time to understand the very > basic statistical analysis here may be very helpful. > > Please feel free to forward this to anyone you know who might be > interested, especially statisticians. > > Thanks in advance, > > Mark > > > > > Name: Mark Weisbrot > E-mail: <weisbrot@c...> > Co-Director > Center for Economic and Policy Research > 1621 Connecticut Ave NW, Suite 500 > Washington, DC 20009-1052 > Phone (202) 293-5380 x228 > Fax (202) 588-1356 > (202) 333-6141 (home) > (202) 746-7264 (cell) > www.cepr.net
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