The mantra of “let the data speak for themselves” is falling by the wayside and ideology promotion is zooming down the fast lane. There are dangers to reputations, companies and global economies when researchers and/or statisticians either see what they want to see—despite the data, or worse, gently massage data to get “the right results.”
Two noted economists, Kenneth Rogoff and Carmen Reinhardt, recently had their findings on country debt to GDP ratios questioned, as it was discovered an Excel spreadsheet error led to some grave miscalculations. And while plenty of financial bloggers and economists took the opportunity to gloat over Rogoff and Reinhardt’s misfortune, there is a larger point…
The Tampa Bay Rays spend significantly less on payroll than some of the wealthier teams in Major League Baseball, but get results that are sometimes better than those that wildly overspend. Their success boils down to two things – understanding how to be a hedgehog, and continual application of statistics and analytics into daily processes.
Probability is defined as the possibility, chance or odds of likelihood that a certain event or occurrence will take place now or in the future. In a world where business managers like to “know the odds”, how does probabilistic thinking (Frequentism and Bayesian) mesh with extreme events (i.e. Black Swans) that just cannot be predicted?
Oakland A’s pitcher Kyle McCarthy gets the Moneyball “analytics” religion and takes his game to a whole new level.