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EconStatsCraft › Bar chart
The chart for comparing quantities across categories. Repeated rows are combined for you, because a bar sits on a category rather than at a point on a line - and a bar chart of raw rows is one bar per row.
A bar chart is the most reliable chart there is, because it asks the eye to compare lengths from a common baseline - the one perceptual judgement people make accurately. That reliability is entirely conditional on the baseline being zero. Cut the axis and the bar lengths no longer stand in proportion to the values, and the chart becomes precisely as misleading as the amount you cut.
Comparing a quantity across categories: regions, sectors, countries, years. Horizontal bars when the labels are long, which they usually are for place names.
Each category k is drawn as a rectangle of length proportional to y_k from a baseline b. The reader compares LENGTHS, so the perceived ratio between two bars is (y_1-b)/(y_2-b) rather than y_1/y_2. Those agree only when b=0. With y_1=102, y_2=100 and a baseline at 99, the true ratio is 1.02 and the perceived one is 3.0 - the chart is not exaggerating by a little, it is showing a different number.
Two categories at 102 and 100. Drawn from zero the bars are practically the same height, which is the truth: a 2% difference. Drawn from a baseline of 99 one bar is three times the other, and every reader will take away "three times as much". The underlying numbers never changed and neither did the chart type. That is why the zero baseline is treated as a rule for bars while remaining a judgement call for lines - the line encodes position, the bar encodes length, and only one of those breaks.
| If you see this | It means | Do this |
|---|---|---|
| Differences looking dramatic | Check the baseline | A non-zero base breaks the length encoding |
| Rotated 45-degree labels | Categories too long for vertical bars | Make it horizontal |
| Bars in alphabetical order | Rarely the reader's question | Sort by value |
| Bars showing group means | Spread is hidden | Add error bars, or use a box plot |
| Forty categories | Beyond comfortable comparison | Take the top n and group the rest |
| A negative value | Bars cross the baseline | Fine, but keep zero visible and labelled |
Box plot, for showing the distribution a bar of means conceals. Stacked bar, for composition within each category.
Line chart · Area chart · Stacked bar · Scatter plot · Bubble chart · Histogram · Box plot · Pie chart · Heat map · Rebased to 100 · Lorenz curve and Gini
Line chart · Area chart · Bar chart · Stacked bar · Scatter plot · Bubble chart · Histogram · Box plot · Pie chart · Heat map · Rebased to 100 · Lorenz curve and Gini
World map · Bivariate map · Flow map · India - state map · India - district map
Descriptive statistics · Summary by group · Two-way table · Classical statistical tests
Multiple regression (OLS) · Logit / Probit · Tobit (censored) · Truncated regression · Multinomial logit · Ordered logit / probit · Quantile regression · Poisson / Negative binomial
Time-varying coefficients (Kalman) · Unit root tests · Correlogram (ACF / PACF) · ARIMA / SARIMA · Rolling-origin cross-validation · Theta method · Unobserved components · STL forecasting · Forecast combination · Markov regime switching · Change frequency (resample) · ARCH / GARCH volatility · Decompose & filter · Spectral analysis · Exponential smoothing · Forecast accuracy
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Life table · Life annuity · Life insurance pricing · Chain ladder reserving · Buhlmann credibility · Survival analysis · Mortality graduation · Aggregate loss model · Ruin probability · Multi-state Markov model · Loss severity fitting
Monte Carlo experiment · F-test, Wald & Chow · Structural breaks & stability
Regression vs machine learning · Ridge / Lasso / Elastic Net · Random forest · Gradient boosting
EconStatsCraft rigorous, plain-spoken econometrics
Regression, panel data, time series and the whole battery of tests. Every result is followed by a verdict you can defend.
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