Posts filed under “Bad Math”
From Betsey Stevenson & Justin Wolfers, a short primer on separating lies from statistics:
1. Focus on how robust a finding is, meaning that different ways of looking at the evidence point to the same conclusion. Do the same patterns repeat in many data sets, in different countries, industries or eras?
2. Results that are Statistically Significant means it’s unlikely findings simply reflect chance. Don’t confuse this with something actually mattering.
3. Be wary of scholars using high-powered statistical techniques as a bludgeon to silence critics who are not specialists.
4. Don’t fall into the trap of thinking about an empirical finding as “right” or “wrong.”
5. Don’t mistake correlation for causation.
6. Always ask “so what?” The “so what” question is about moving beyond the internal validity of a finding to asking about its external usefulness.
Great stuff. I recall something from Carl Sagan on this — I’ll see if I can dig it up.
Six Ways to Separate Lies From Statistics
By Betsey Stevenson & Justin Wolfers
Bloomberg View, May 1, 2013 http://www.bloombergview.com/articles/2013-05-01/six-ways-to-separate-lies-from-statistics
This column is not about working too hard, or the dangers of high cholesterol, or lack of exercise. It is about a rash of suicides within the financial community. What this actually means is less certain than the reporting on it might imply. Yesterday, 47-year-old Edmund Reilly, a trader at the Vertical Group, jumped in…Read More
Category: Bad Math
Five years ago today, I made the luckiest market call of my career. A few details and some context first, than an explanation as to why this was so lucky. In 2005, I knew something was amiss in the global markets. The various metrics we track showed that credit had become a full on bubble,…Read More
One of the things that baffles me about people is how they completely misunderstand risk. Lots of my friends panic about things that have no real chance of killing them, but ignore the things that will. This can lead us to make irrational decisions, and sometimes irrational policy. What really will kill us? Watch and learn.
What Kills Us? How We Understand Risk.
I never really liked the classic definition of boomers as those born 1946 to 1964. Its overbroad, and well, wrong. That age cohort should really end in 1959. I see why they Demographers made up that range — its so there is a seamless, artificial flow right into to the Gen X group, born 1965…Read More
@TBPInvictus here. In yet another stunning display of journalistic malpractice, Terry Jeffrey put out the following piece after last Friday’s NFP release: Because it suited his (political) purpose, Jeffrey jumped on the Household Survey; looking at the Establishment Survey would not have provided such a dramatic headline. Indeed, it would have provided, for…Read More
I am writing up my BBRG coverage of the innumerate business reporting of Black Friday and the holiday shopping weekend. The press as per usual got it wrong again this year. Here is the press release from the NRF, pushing their usual survey silliness as if it were actual retail sales data: “More than 141…Read More