BizJournals Portfolio
Home >   Business Views, Opinions and Blogs >   Business Blogs >   Market Movers >  

The Limits Of Empiricism Revisited

Market Movers

by Yves Smith and Felix Salmon
Main
Bank of America: Not Glamorous   Blogonomics: The Econoblogosphere is Not in Danger

Recent Blog Posts

Links

Oct 18 2007 12:00am EDT

The Limits of Empiricism, Revisited

Deirdre McCloskey is in fine fighting form, at least by the standards of statisticians:

Good fit is not the same thing as importance. In fact, usually it has nothing to do with importance.

I think she's absolutely right. People who use a lot of statistical analysis, economists among them, tend to gravitate towards the measurable. Often, important things aren't easy to measure, and things which are easy to measure aren't important. While statistical analysis should be used to examine some a priori hypothesis, too often hypotheses are constructed around whatever data might be lying around. And if the data is crap, the results of any statistical analysis on that data will also be crap, no matter how good your fit.

(Earlier: The Limits of Empiricism)

blog comments powered by Disqus
Real Business, Real Results
Out of the 'Family'

Did anyone at Microsoft ever watch the (gasp!) offensively funny show Family Guy?

Cruz Missile Lands

Ex-Morgan Stanley exec Zoe Cruz is now heading her own hedge fund. Are Wall Street's leaders done?

Scandal Chic

Martha, Bernie and Skilling know that what you wear for court can go a long way in public perception.

spotlight on

Health Care

Bad to the Bone No More

Companies such as General Mills say they're stepping up efforts to change employees' bad behavior and promote healthier lifestyles. Read More