Posts tagged as:

statistics

Evaluating returns to social media

July 21, 2009

A collusion by wetpaint and the Altimeter Group has resulted in a fanciful study on social media. Normally, a paper like this wouldn't be worth addressing, but the amount of attention being paid to its questionable conclusion warrants a closer look. And that conclusion is: [T]his landmark study has found that the most valuable brands in [...]

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On teaching math

June 29, 2009

Arthur Benjamin gives a short (3 minute) TED talk on the problems with how math is taught to high school students in America. He notes that the current curriculum is a sequence beginning with arithmatic and leading to the ultimate goal of calculus. But calculus isn't something most people use once they graduate - how [...]

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Inferred ratings and modelling teacher comments

June 24, 2009

Another aspect of my conversation dealt with inferred ratings, a problem I've crossed before in other areas. There are two primary cases in which this arises: censored data and self-selection bias. In the first case of censored data, a problem is caused by the ratings system not eliciting useful responses. An example is a system [...]

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Personalized Yelp ratings

June 24, 2009

I had a great conversation last night which at one point verged into the pros and cons of various ratings systems. In particular, we discussed the "star+comment" system used by Yelp, in which between 1 and 5 stars can be assigned in addition to a text comment of arbitrary length. Yelp does some clever things [...]

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When worlds collide

June 17, 2009

I just learned from Andrew Gelman that Mandelbrot wrote a paper on taxonomies... in 1955.

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Random forecasts (with echoes!)

June 15, 2009

And speaking of forecasts, I'm reminded today of one of my favorite forecasting errors: the echo. This morning, the manufacturing survey missed the forecasted amount, and many pundits commented that it contributed heavily to the market's fall. Here is a plot of the manufacturing survey level as reported each month in red (prior to any [...]

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Truth in advertising?

June 15, 2009

I find this graph very interesting, not just because of any implied political statements, but for how it highlights the absurdity of economic forecasting and the potentially misguided trust we place in such numbers. The blue lines were circulated by Obama's economic team when they were pitching the stimulus bill in order to illustrate its [...]

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Illustrating the importance of data visualization

June 12, 2009

Andrew Gelman discusses research on attitudes toward gay marriage, by state, and notes this graph in particular, which shows the change in opinion over the last 15 years: Critically, he points out that the states which experienced the greatest change in attitude were the ones that already were most receptive. A naive analysis of the [...]

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Critiquing the Crimson

June 9, 2009

The Harvard Crimson has published its annual senior survey, which is making headlines in part because very few seniors are going into finance. Selected results were presented in an interesting visualization (the image below links to a full size pdf): Now that my brother has graduated after successfully steering the Crimson's business operations to one [...]

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Lies, damn lies...

June 2, 2009

A fascinating look at the politics of government statistics from Carl Bialik's WSJ blog.

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LARS and the lasso

May 28, 2009

I just came across a paper on LARS, the linear model selection algorithm that's sweeping the nation. The mathematically and/or masochistically inclined may view it here.* Ok, so it's not quite that popular, but it is being heralded as one of the biggest advances in linear modelling in a few decades - and that's saying a [...]

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Urban mathematics

May 20, 2009

Zipf's law is another mathematical phenomenon not entirely unrelated to Benford's law (in fact, some think that Benford is a special case of Zipf). (Aside, it's funny how after you discuss something, it seems to pop up everywhere - Kahneman and Tversky would have a lot to say on that, I'm sure.) Zipf's law is [...]

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Visualizing randomness

May 19, 2009

Daniel Becker's diploma dissertation was on the visualization of randomness - finding concrete ways to map the highly abstract idea of random behaviors and patterns. The resulting portfolio is fascinating, even for someone without a statistical background, in particular for the way in which it lends a semblance of order to these inherently chaotic processes. [...]

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Charting value (maybe)

May 19, 2009

Silicon Valley Insider presented this as its Chart of the Day today, saying it indicates the success of Microsoft's "Laptop Hunter" ads: First of all, it takes some digging to learn what this scale even means, which brings us to a violation of charting rule #1: do not use a misleading axis! The true scale [...]

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F-tests begone!

May 18, 2009

Andrew Gelman just wrote a blog post regarding interaction terms in multiple regression and concludes: You never have to do an F test. Just forget about that stuff! I find it incredibly refreshing when someone (a professor, no less!) is willing to cut through the math and get down to common sense. And I particularly hate [...]

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Interviewing Myron Scholes

May 16, 2009

Speaking of LTCM (and of this Sunday's Times Magazine, for that matter), here's an interview that's going to run with Myron Scholes, who comes off like a bad comedian. The questions are poor and the answers arguably worse. Let's take a look, shall we? The second question: "You're known as the intellectual father of the [...]

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Fact-checking the singularity

May 10, 2009

This movie made the rounds last year, but now that it's resurfaced on Mashable I need to revisit the frustration it has caused me. First, here's the video in question: It's a tour of the "pace of progress," designed to alternatively intimidate the viewer by revealing his lack of identity and insignificance and astound the [...]

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Monte Carlo: house of cards?

May 8, 2009

The WSJ recently ran apiece on Monte Carlo risk management: Here is how a typical Monte Carlo retirement-planning tool might work: The user enters information about his age, earnings, assets, retirement-plan contributions, investment mix and other details. The calculator crunches the numbers on hundreds or thousands of potential market scenarios, guided by assumptions about inflation, [...]

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A Derivation of Benford's Law or: Roll Your Own Fraud Detector

May 1, 2009

An explanation of Benford's law, which describes how frequently certain first digits should appear.

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On the age of empiricism

May 1, 2009

Caught this on Rortybomb - Barry Eichengreen has penned an excellent piece on the role of models in academia and finance, as well as the growing importance of empiricism (a point with which I particularly empathize).  An excerpt: Maybe so. But amid the pervading sense of gloom and doom, there is at least one reason for [...]

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The mysterious case of the SPX spike

April 23, 2009

Get out your tin foil hats, there's something sinister afoot! Zero Hedge, a blog which has been getting an astounding amount of press lately (in particular because of this rumor) posted the following picture this afternoon "without commentary" (please note I recreated their image to use EST times): This is called a volume-at-price chart, or [...]

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QOTD: anecdotal evidence edition

April 21, 2009

Few things bother me more than the use of random or one-off stories as evidence. Reasoning like that does absolutely nothing to sway me, and I'll probably just mumble something about Taleb's Fooled by Randomness. In a somewhat related post, Megan McArdle put it succinctly: The plural of "anecdote" is not "data". Brilliant.

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Thoughts on risk management

April 20, 2009

Naked capitalism put out an open call for thoughts on the state of risk management on trading desks. The comments are well worth a curious read (how many times have you said that about a blog post?). It is interesting that when you get enough academics and practitioners shouting in a room, risk management becomes [...]

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How much, statistically speaking, does the NL West suck?

April 15, 2009

Joe Morgan made the following statement on ESPN tonight: The NL West is the only division that hasn't won the World Series in the past seven years. Now, that's amazing. Except, as my brother points out (drawing on his years of accumulated baseball wisdom), there are six divisions. Start with the assumption that each division [...]

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On revisions, episode III

April 6, 2009

Or: Yet More Ways to Lie With Statistics. Last Thursday, the month-over-month percent change in factory orders for February was announced at 1.8%.  The expected number was 1.5%.  Sounds like good news, right?  Unfortunately, the January number was revised from -1.9% to -3.5% in the same release. The easiest way to make a month-over-month change [...]

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Spurious correlation: fruit edition

April 3, 2009

Who says correlation doesn't imply causality?  Borrowed from In the Pipeline.

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It's never too late for Stats 101

March 26, 2009

Google's Chief Economist, Hal Varian, on jobs in the upcoming decade (emphasis mine): I keep saying the sexy job in the next ten years will be statisticians. People think I’m joking, but who would’ve guessed that computer engineers would’ve been the sexy job of the 1990s? The ability to take data—to be able to understand [...]

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InfoGraphics in motion

March 26, 2009

One of my favorite music videos is Royskopp's Remind Me, because of it's cleverly informative visual style, not unlike an animated airplane safety card or pictograph instruction pamphlet: Recently, a student named Tomas Nilsson has reinterpreted the classic story of Little Red Riding Hood in similar fashion: In fact, the style bears some resemblance to the Microsoft [...]

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Correlation

March 11, 2009

Statistics humor: (xkcd via AK's tumblelog)

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Ken Lewis makes dubious claims

March 9, 2009

BOA chairman Ken Lewis has written an opinion for the WSJ ("Some Myths About Banks")  containing the following "myth" and rebuttal: The banks are insolvent. In the past 18 months, we've seen fewer than 50 bank failures. That compares to about 2,000 failures or closings of commercial banks or savings institutions between 1986 and 1991. There may [...]

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