World Metrology Day (May 20)

World Metrology Day, Science and Commerce
How to Reinvigorate the Economy via Better Measurement

An Open Letter to the President’s
Economic Recovery Advisory Board

by

William P. Fisher, Jr.
Living Capital Metrics
5252 Annunciation Street
New Orleans, LA 70115
919.599.7245
William@livingcapitalmetrics.com
http://www.livingcapitalmetrics.com

“Measurements in Commerce: Metrology Underpinning Economic Development” is the name of the National Institute for Standards and Technology’s World Metrology Day educational event in Gaithersburg, MD, held on Wednesday, May 20. Similar events around the world celebrated the economic prosperity and scientific successes that have followed from the signing of the Metre Convention in 1875.

For those wondering what the noise is all about, there are two reasons why we need a World Metrology Day. The first one is what the speakers at the NIST educational event addressed. Despite the vitally important role measurement and technical standards play in the economy, we take them almost completely for granted. Their very invisibility indicates how well they are working, but also makes it important that the public be reminded about them from time to time.

The second reason why we need a World Metrology Day concerns the role measurement science can, ought, and ultimately must play in reinvigorating the economy, and in supporting green, socially responsible, and sustainable economic policies and practices. Better measurement is capable of enhancing the security of the existing economic pie, and in expanding both its size and the fairness with which it is divvied up. In order to understand how these expansions are coming about, we need to start from what metrology is and does in the first place.

Confidence in our rulers, weight scales, clocks, thermometers, volt meters, and so on—trust that they all read out the same value for the same amount measured—is what metrology gives us. As you might imagine, commerce and science were seriously impeded in those historical epochs when measures varied depending on who made them, who used them, or which instrument they were made with. Ensuring consistent price-value relationships, and the interoperability of various technologies, are highly significant ways in which metrological standards keep transaction costs low and lubricate the wheels of commerce.

The need for standardized product definitions makes metrology ubiquitous. Metrological standards are quite costly, as much as 20 percent of any nation’s GDP, making them much too expensive for any one business or industry to create for themselves. But those investments provide remarkably high returns, from 32% to over 400%, as shown by NIST studies. Small businesses benefit to an especially large degree from the efforts made by NIST and other standards groups around the world to ensure the smooth flow of products in global markets.

There is a human side to measurement, too. Beyond the market and the laboratory, fairness in measurement is a recurring theme in the Bible, the Torah, and the Q’uran, as well as in the Magna Carta and the constitutions of nations everywhere. The Golden Rule itself can be seen as demanding that the scales of justice be balanced in the hands of a judge blind to everything but the truth.

And so metrological standards not only provide cost-effective precision, they also embody our notions of fairness, justice, and right conduct. The French Revolution, for instance, very self-consciously understood the universal measures proclaimed in the metric system as symbolically representing the ideals of universal rights for all people.

These historical achievements provide us with a model for the future. How so? The current global crisis resounds with cries for accountability and transparency, with expanded human rights, social justice, and environmental quality. Activists and managers in every area, from education to health care to governance to philanthropy, deplore their metrics and wonder how to beg, buy, borrow, or steal better ones. Their needs are real, demand is huge, and, fortunately, the methods they need are readily available.

Demand for fair, universally uniform, comparable, and accessible measures of school, hospital, employment, community, and environmental quality sets the stage for a major expansion of the role of metrology and its effects on the economy. Standardized product definitions for tangible amounts of things sold by weight, volume, area, time, or kilowatts are essential to the efficiency and fairness of markets. They will be equally essential to the efficiency and fairness of human, social, and natural capital markets.

Some readers may at this point be wondering how measurement with the necessary mathematical rigor and scientific precision can be obtained for this purpose, if it can be obtained at all (see box, below). Although measurement in psychology and the social sciences is roundly disparaged by many unfamiliar with its technical achievements, it has come of age in recent decades. The wider world desperately needs to know more, both about the advances that have been made, and about what still needs to be done.

In a nutshell, tests, assessments, and surveys are routinely calibrated to be equivalent in principle with physical measures in their objectivity, mathematical rigor, practicality, and meaningfulness. The problem is not only that hardly anyone is aware this is being done; more importantly, even those doing the work are unaware of the need to create systems of metrological standards for each various form of human, social, and natural capital. The special value of being able to think together harmoniously, using instruments tuned to the same scale, is lost on those accustomed to dealing with one customer, student, or patient at a time, or with one test, survey, or data set at a time.

But being able to think together in a common language as consumers and producers is what makes a market efficient. Having different names for the same things, or the same names for different things, is confusing. When measuring units change in a variety of uncontrolled ways, communication is compromised and markets are bogged down in frictions that waste resources, add to costs, and can leave one or the other partner to a transaction feeling cheated.

Unfortunately, measures of the quality of schooling, health care, governance, environmental management, etc. almost always vary in uncontrolled ways. Assessment instruments are only rarely calibrated using the kinds of quality standards we take for granted when we weigh produce in the grocery store. And even when instruments are properly calibrated, and they increasingly are, they do not share a common metric.

In addition, because so few know that instruments can be calibrated and that they can be equated to a shared quantitative scale, we lack the systems, both vertical, within organizations, and horizontal, between them, through which the information might flow to each different place it is needed.

What we need today are

1. metrological systems designed to calibrate instruments, equate them, and maintain the equatings,

2. educational systems designed to inform researchers and students about the value of research designed to produce meaningful and stable measurement,

3. management systems designed to incorporate the metrics where they are needed, at every level and in every division, in production, quality improvement, accounting, marketing, human, social, and environmental resource management, governance, etc.; and

4. funding to support each of these areas of endeavor.

The funding is significant, both for the large amounts that will be needed, and for the quality of the investments to be made. Given the very large returns obtained from existing metrology systems, there will be intense interest in extending those systems to new domains. NIST plainly should have a new division focusing on measuring instruments and metrology systems for human, social, and natural capital. NIH, AHRQ, and other federal research arms should require all research proposals to address instrument calibration, how the resulting metrics will be maintained relative to reference standards, and how stakeholders’ various applications will employ it. Further down the road, new accounting standards will be needed for incorporating the new forms of capital into spreadsheets, and econometric models will include values for service products defined in common terms.

NIST’s World Metrology Day symposium emphasizes the the everyday and essential role that measurement science and standards play in virtually every economic transaction. New metrological horizons are upon us, however. The crisis we are currently experiencing is a prime opportunity for creating and investing in the infrastructure of new systems that will pay dividends for years to come.

———————————————————-
Box
Some may be suspicious of the claim that tests and surveys can measure with the same kind of objectivity as a clock or weight scale. Such suspicions are, however, easily overcome with a bit of history. Of particular interest are two electrical engineer/physicists turned psychologists and a mathematician, all of whom had close connections with the University of Chicago.

L. L. Thurstone was a former electrical engineer turned psychologist who became the first president of the Psychometric Society. Writing in 1928, while a Professor at the University of Chicago, Thurstone held that measurement was achieved only to the extent that an instrument behaving like a ruler could be calibrated. As Thurstone put it, if a ruler measured differently depending on whether it was a piece of paper or a rug that was being measured, then that instrument’s trustworthiness as a measuring device would be impaired. Thurstone, his colleagues, and his students made significant headway in constructing scales that lived up to this demanding criterion. His methods were deemed cumbersome by those less concerned with meaningfulness and science than with expeditious analytic productivity, however, so much of Thurstone’s best work was neglected as the years passed.

Further strides were made in the 1950s by Georg Rasch, a Danish mathematician who had studied with Ronald Fisher in London in 1934-5. Rasch was also strongly influenced by the Nobel economist, Ragnar Frisch, with whom he studied in Oslo. From Fisher, Rasch took an emphasis on statistical sufficiency, and from Frisch, the related understanding that generalizable results must be autonomous from the data representing them. The connections with Fisher and Frisch led Rasch to work with the Cowles Commission at the University of Chicago in 1947, where Rasch made the acquaintance of the statistician, Jimmy Savage. A few years later, Rasch showed decisively that, with the right test instrument and data, the reading ability of a child could be measured with the same kind of objectivity obtained in measuring her or his weight.

Rasch’s models have become widely used in high stakes and commercial testing globally, especially in advanced computerized examinations, largely due to the efforts of Benjamin D. Wright. Wright had worked under Nobel laureates Townes, Mulliken, and Feynman in a previous life as an electrical engineer and physicist. In 1960, as an Assistant Professor of Education at the University of Chicago, at the urging of his friend and colleague, Jimmy Savage, Wright hosted a seminar series given by Rasch. Wright felt that Rasch resolved some of his own dilemmas concerning the reconciliation of the scientific values he had learned in physics with the methods then popular in educational research. Wright went so far in adopting Rasch’s models as to develop improved methods for estimating their parameters, new statistics for evaluating data quality and instrument reliability, what was for many years the most advanced software for analyzing data, and professional societies and publications for sharing new contributions.

Toward the end of his career, Wright wrote that there is no methodological reason why measurement in education and psychology cannot be as stable, reproducible, and useful as measurement in physics. Over 50 years of experience with Rasch’s models, and 30 before that with Thurstone’s, provides evidence conclusively supporting Wright’s position.

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One Response to “World Metrology Day (May 20)”

  1. A Simple Example of How Better Measurement Creates New Market Efficiencies, Reduces Transaction Costs, and Enables the Pricing of Intangible Assets « Livingcapitalmetrics’s Blog Says:

    […] manufacturing, chemicals, photonics, communications and pharmaceuticals (NIST, 2009). Previous posts in this blog offer more information on the economic value of metrology. The point is that the […]

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