Who likes Math?
 

It's about time. Economics lies at the crossroads of bad math, bad science, and bad history.

Around 1999, I read what was the common wisdom among economists at the time -- that "the effects of the information revolution can be seen everywhere, except in the productivity statistics." It was the sort of bon mot that would get economists nodding their big woolly heads, and thinking mockingly about all the silly little people who think computers make a difference.

The problem is, only an economist could read that statement -- that "the effects of the information revolution can be seen everywhere, except in the productivity statistics" -- and come to a conclusion other than "wow, the productivity statistics must be really fucked up."

Who likes Math?
 

http://www.stat.sc.edu/~west/javahtm...MakeaDeal.html

this lets you prove it to yourself....

Who likes Math?
 

When throwing out the bathwater, be careful with the baby.

Who likes Math?
 

I still don't get it.

Who likes Math?
 

Which leaves me yet another opening to tell my favorite economist joke:

Three people are stranded on a desert island. One is a physicist, one is a chemist, and one is an economist. They have no food or drinkable water except for cases of canned tuna fish. But they have no can-opener with which to open the cans.

The physicist says, "I have an idea. Let's climb this cliff and drop a can onto the rocks below." The physicist tries the experiment. A can did explode on impact, but the tuna fish sprays in all directions leaving nothing edible from the can.

The chemist says: "I have an idea. Let's soak a can in the ocean water and see if the salts and minerals in the seawater will pore a hole into the can." The chemist drops a can into a pool of seawater, but nothing happens.

The physicist and the chemist are depressed. But the economist triumphantly pronounces: "I have the answer! Let's assume that we have a can-opener!"

Who likes Math?
 

I still don't get it.

Who likes Math?
 

I actually did better not switching.

Who likes Math?
 

Hank told me you were the dumbest.

Who likes Math?
 

Screw the experiment. The page you found has a better explanation:

"The probability of picking the wrong door in the initial stage of the game is 2/3. If the contestant picks the wrong door initially, the host must reveal the remaining empty door in the second stage of the game. Thus, if the contestant switches after picking the wrong door initially, the contestant will win the prize. The probability of winning by switching then reduces to the probability of picking the wrong door in the initial stage which is clearly 2/3."

TM

Who likes Math?
 

Actually, that's the fatal flaw of economics: the assumption that people make rational decisions.

Who likes Math?
 

I'm not a contrarian all the time, which I guess makes me a contrarian in regard to the average contrarian ethos. My thinking is that you're just as likely to be safe following your gut, as spooky suggested, as you are following volumes of studies. Say that to a person who believes in statistics and you're decreid a heretic.

Re epidemiology, a family member who is an oncologist scoffs at the idea of predicting anything unless the predictor being used is genetic heritage. He showed me that govt stats on what you're "supposed" to get if you do "[insert behavior]." If these stats were at all even close to accurate, we'd have all died of STDs, liver disease, cancer and heart attacks years ago. As this particular person said once, "Other than the genetic thing, we have as much clue about what causes disease now as we did in 1950. Its a crapshoot - a variety of circumstances all hitting at the right place at the right time which probably causes disease, so trying to find a single cause is pretty futile" (paraphrased). I think the same applies to most economic studies. Too many intervenin circumstances IRL.

Who likes Math?
 

False use of language. Once one door has been opened, you are faced with a new choice, not merely a continuation of the original. At that point, to stay or to change - both are .5 choices.

Who likes Math?
 

Thanks!

Who likes Math?
 

That's what I said!

This is what I'm starting to try to come to terms with: "The probability of winning by switching then reduces to the probability of picking the wrong door in the initial stage which is clearly 2/3."

I'm going to have to do this experiment on my own time with actual doors, cars and donkeys. (Yeah, I'm leaving myself open, I want to see what you suckers got.)

TM

Who likes Math?
 

You didn't read Irrational Exuberance? I heard Steven Leavitt's recent book debunking most statistical sacred cows is pretty funny...