Where? Very Important

Physical location determines many things

Where you are born determines a lot about what your future is going to be. This goes from the national level where different countries have different quality of life outcomes … and it happens at the very local level where there are differences between different neighborhoods.

Some places have a lot of natural advantages … others do not. This is a function of the place. Knowing where something is helps to identify some of the characteristics that are associated with the place.

Mapping

TVM has location data associated with every other aspect of data. … and from this is is possible to make maps that show what is where … and conversely for a place, what is there. Typical national data has little meaning for making decisions … merely it serves to identify the outcome … on average … of decisions that were made. These national level data are inadequate for managing at the local level.

The location of things … the spatial element … is a very important in very many situations.

Safety … the fighting is in the “next valley”

I was working in an area affected by civil war, and traveling with a local colleague to visit a commercial farm in a remote rural location. I expressed concern about our safety … and was assured that the fighting was in the “next valley” and would not affect where we were going! It turned out my colleague was right … we traveled without incident! I learned that even something as nasty as civil war has an important spatial component. Even in a civil war, a civilian population still has to get on with its economic life as best it can!

Comparative analysis

Each place is different … but comparison of performance between different places can show what it is that is allowing one place to perform well and another not to perform at all well. Sometimes the difference is associated with geographical characteristics, sometimes they are societal factors.

There are very big difference between places

There are very big difference between places ... and spatial comparisons helps to sort out the various causalities. The big difference between the socio-economic status of the industrial north with the under-developed south is just a very aggregate example of this.

Some of the lessons that can be learned are uncomfortable. What lesson should be learned from the fact that there is science and technology that has put man on the moon, but our society cannot organize itself so that there is enough food for people on the planet. Some places seem to have abundance ... and some places have critical shortages.

Basic spatial metrics

The basic spatial metrics are nothing more than advanced common sense. The data are little more than what a middle school student might learn in a geography lesson. But nevertheless, the data are important. Some of the elements that have to be associated with the place include the following:

• Where is it,
• How big is it,
• What is the population,
• What are the physical geography characteristics,
• What is the weather,
• What are the natural resources,
• What are the characteristics of the land,
• What organizations are present,
• etc.

The whole foundation of TVM Value Accountancy is linked to the idea that a place ... the Community ... is the entity around which there should be reporting. The reporting should go beyond money reporting to something that embraces non money elements and the consumption of value and the creation of value in addition to the money costs and money incomes.

All of the elements that were referred to above are an integral part of TVM Value Accountancy.

Importance of multiple datapoints

The importance of multiple datapoints applies in spatial analysis just as it does in other techniques of analysis. It may not be easy to know exactly about something ... or the complete story about anything ... but most often, it is relatively easy to learn something by compariosn with what it is in another place.

Spatial materiality

Materiality is a key to successful use of data ... but what is important in one place may not have the same importance in another place. It depends. While there may be an academic causality that can be identified using sophisticated analysis, most of the big questions can be answered using very simple data and very simple analysis.

Starvation

There is no food ... the crops have failed ... people are dying. Very simple data are needed to figure out that there is a problem with starvation. More important very simple data would have shown what are the causes of starvation in a specific place, and what might be done about it

There is a substantial amount of mathematics and statistics being used to analyze data ... and the mathematics are academically rigorous ... but it does not seem to have had much impact. There is a systemic problem of methodology and materiality. Most of what is being done in terms of data and analysis has little practical value and has made little difference in the past ... and needs to change in order to do anything of use in the future.

While it may not be possible to have absolute numbers about many important things ... time series analysis helps to show whether progress is being made or not, and something about how fast it is happening.

Getting results I have always taken the position that fixing a big problem was a lot easier than improving a near perfect operation. If this is a valid reality, then it should be possible to make a big impact on the global relief and development industry.

Price time series have historic value in putting current prices in perspective ... but prices are also a key indicator of what might be going to happen in the immediate future, or ever a longer time span.

A big part of the theory of economics concerns itself with prices and behavior in the market. It is very interesting, however, to try to understand what is happening to prices based on real world facts about costs, demands and structure.

Time series of prices are very powerful. Every major market has time series about prices, whether the market is for financial instruments, commodities or engineered items. Price information is also used in small markets ... and is just as powerful. More of the small market data re needed to be collected and put into easily accessible form. The outcome will be interesting.

Shrimp prices in different markets

I became the CFO of Continental Seafoods Inc. in June 1974. In the previous twelve months crude oil prices had increased from $3.00 to $13.50 and costs and prices for everything was in turmoil.

Cost time series are very interesting ... but much less accessible than price time series.

Cost is a result of productivity ... which in turn is a result of science, technology, organization, training and investment.

Cost estimating for the World Bank

For several years I did financial analysis

Time series of costs may be very different from a time series of prices. Costs reflects productivity and it is costs that have the most impact on the socio-economic status of the planet. Cost has multiple components, and one of the most useful data points for cost is the one that eliminates all the profit elements from the cost value chain. The socio-economic success of the last two centuries has been reduction in cost.

Productivity in different places

Enabling environment in different places

Comparing data from different places

Budget and actual by month is a commonly used plot. Sometimes it does not tell very much, sometimes it does. Budget/Actual By Month

This plot of budget and actual by month is from place A and it does not show very much ... some months are above budget, some below. There is no clear seasonality.

But this plot from Place B shows what seems to be some important seasonality. The budget looks as if it was a year number divided by 12 ... the actual has a distinct form. What has caused this seasonality can be researched and used in future planning.

Project performance impact by place

The following graphic shows the very different timeline for incurring costs and realizing values. This is a