Benchmark Comparisons in Data Visualization

Category: Benchmark

Benchmarks serve a critical role in the visualization of data because, through them, the viewer can assess the data based on a target or standard. Rather than displaying a set of figures, data visualization through benchmarks helps the audience answer the question of whether the data meets the expected standards. This article will examine a data visualization posted by the New York Times containing a benchmark. 

Selected Visualization

The visualization that I selected is from The New York Times, and it compares inflation rates in the U.S. to a long-term target inflation rate of 2% set by the Federal Reserve. This graph is a line graph that shows inflation over time, including a line that represents the inflation targeting set by the Federal Reserve.

Link to original visualization:

https://www.nytimes.com/interactive/2023/06/13/business/economy/inflation-fed-interest-rates.html

How the Benchmark Is Displayed

In the chart, the benchmark is illustrated using a horizontal dotted line positioned at the level of 2% inflation. This dotted line stays steady while the inflation data wobbles around it. The benchmark is also marked on the chart, thereby eliminating any confusion that it might be an economic indicator. It is the Fed target.

The use of a lighter color in the benchmark line compared to that of the bold line indicates inflation, making it easier to concentrate attention on the data, though the benchmark line still serves as a reference.

Effectiveness of the Benchmark

The reason this is effective as a benchmark is that it shows whether inflation is meeting, exceeding, or falling short of what the Fed wants immediately. Without this information, changes to inflation levels could be observed, but they wouldn’t be put into context.

In this case, the flows are shown over the whole chart, meaning that viewers are able to make informed comparisons of inflation at any point in time. Even those with little knowledge of economics would be able to grasp the meaning behind the graphic.

Reflection

On the whole, this type of visualization uses the benchmark in a clear and effective way. It is easier to understand with the dashed line, labeling, and the difference in colors between the information and the benchmark.

In this example, a simple benchmarking exercise is used to make a chart more meaningful, as an assembly of numbers, rather than just a simple series of numbers on a chart.