Wednesday, April 22, 2015

Alternate explanations

An interesting argument on a subject with likely little partisan heat. Americans are forgetting how to write checks, Google data show by Christopher Ingraham.

Here's solid evidence to support that Americans are writing fewer checks:
Today, Americans are writing fewer checks than ever. According to the Federal Reserve's most recent study of how Americans pay for things, "the number of checks paid declined more than 50 percent since 2000." Meanwhile, electronic and card payments tripled over the same period.
But that's not what the headline is arguing. It argues we are forgetting how to write checks.

What evidence is there that people knew how to write checks but have forgotten?
Here's an interesting fact: falling check use has been accompanied by a rise Google searches for "how to write a check." Today, those searches are nearly five times as prevalent as they were 10 years ago. And each year, those searches peak in late August and early September -- when kids are returning to college. Students living off-campus for the first time are likely facing the daunting task of writing their first check, for an electric bill, a cable payment, or, especially, for rent.
That's reasonable evidence but searches are a proxy, albeit a pretty good one, for not knowing how to write a check. It is also probably significant that there is an annual spike when kids go off to college. However, there are some loose ends. The spike might possibly explain the timing, but most kids graduating high school make some sort of transition to independence. They join the army, they join the workforce, they move out of the house. All of them are likely to be facing the task of writing checks for the first time.

But did kids know and have forgotten how to write checks? Not likely. They either knew or they didn't know, it seems unliekly that they simply forgot.

Are there alternate explanations for why people are searching on how to write checks. Yes. The geographic distribution of the searches is probably significant.
Looking at the geography of check befuddlement, searches for "how to write a check" appear to be clustered in the Northeast -- Pennsylvania leads the pack, followed by Delaware, New York, Massachusetts and Hawaii. There are a lot of colleges in the Northeast, which fits the hypothesis of confused college kids driving the trend. But it doesn't explain why there are also a lot of people looking for check-writing help in Oklahoma, or in Louisiana.
Ingraham properly notes, to support his hypothesis that lack of knowledge of check writing is a demographic cohort issue, that there are a lot universities in the Northeast. However, what else is notable about the map in the article? The most prevalent searches are in areas with high immigrant populations. 15% of the US population is now foreign born and all of them have to become accustomed to American practices including how to write a check. So perhaps, searches on how to write checks is not an issue of native born kids forgetting how to write checks, or even not knowing how to write them in the first place. Perhaps it is the foreign born population which is driving those searches.

There is nothing riding on whether Ingraham is right or wrong. All this is is an exercise in revealing how easy it is to get caught up in Just So stories about the causes of a phenomenon and leaving unexplored alternative explanations, well, unexplored.

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