Daniel Ockrent's column in yesterday's New York Times takes a refreshing look at the misuse and misinterpretation of statistics in journalism. His examples make for a cautionary tale for any reader.

He talks of the often cited "X is suing Y for £1 million", pointing out that the amount is meaningless outside of indicating the greed of the lawyer - only final settlements provide meaningful figures, but are normally not so headline-grabbing.

Then there's one of my favourites - the figures relating to the size of the black economy or the drugs trade, which roll off the tongue or onto the page with little or no explanation of how these figures have been calculated. The margin of error on such calculations surely makes them all but worthless.

Other examples include the historical comparison of figures which ignore inflation (Shrek II is the 3rd biggest grossing film of all time!) and/or population growth.

Ockrent's best example exposes the crassness of that sacred indicator of the US's business fortunes, the Dow Jones Index.

The Dow Jones Industrial Average is no more meaningful than a hiccup. If I were Dow Jones & Company, I’d be thrilled to have my brand name repeated daily in hundreds of newspaper columns, broadcast reports and web mentions, but I’d also keep my fingers crossed, knowing that someday the press will no longer be so easily suckered.

There are three key problems with the Dow: its tiny selection of 30 stocks (a number established three quarters of a century ago, in an infinitely less complex market era) can’t begin to represent the variety of investment instruments sold on American exchanges; it specifically excludes transportation and utility companies, which Dow Jones tracks separately; and it’s mathematically preposterous.

Daniel Gross explained why in an article published two years ago on Slate.com: “Every time one of the stocks in it moves up one dollar, the Dow moves up a set number of points. In the real world, a dollar move in a $100 stock has an entirely different meaning than a $1 move in a $10 stock—but the Dow regards them as equal.”

That’s sort of like saying a $1.50 tip on a ten dollar breakfast is the same as a $1.50 tip on a hundred dollar dinner. The Standard & Poor’s 500 not only incorporates a much larger number and a much broader range of securities, it weights its elements logically. Times editors would be wise to execute a permanent “replace all” in their skulls and in their stories, forever banishing the Dow to the same attic where Wall Street keeps the ticker tape.

It makes one wonder whether certain statistics should have the equivalent of cigarette health warnings ("Warning: this statistic may seriously damage your perspective!")

Perhaps we could do with agreed SI units of measure for certain commonly quoted figures (per capita, per day, as a % of GDP etc.).

Then all we'd need to do is get the politicians to sign up...