USA unemployment statistic creates a sensation
“Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers.”
– Jack Welch
Thursday morning I attended a briefing on the economy by an expert from Wells-Fargo bank. Looking over the trends in USA unemployment rates he noted that no incumbent since World War II has achieved re-election when joblessness exceeded 8 percent. Friday the Bureau of Labor Statistics (BLS) announced that the the national unemployment rate is now 7.8%, an improvement from 8.1% last month. How accurate is this number and is it precise enough that a 0.3% difference can be considered significant? I agree with the conclusion of this critique posted by Brookings Institution that “a large part of monthly unemployment fluctuations are spurious.” So, really, all this fuss about it being 8.1 versus 7.8 percent is really silly from a statistical point of view. However, it is entertaining!
Rock on with algorithms?
Posted by mark in pop, Uncategorized on October 2, 2012
I started off my career as an experiment designer before the advent of cheap calculators. Paying $400 for an HP unit that (gasp!) did logarithms went far beyond my wherewithal in 1974. That was roughly the tuition for one college quarter at University of Minnesota if memory serves. I managed to cover that cost plus room and board by working 24 hours a week washing pots and pans at a hospital kitchen. Those were the days!
Calculating effects from the two-level factorial designs I did that summer as an intern at a chemical research lab required a lot of hand calculations—many numbers to add and subtract. Thankfully a fellow named Yates developed an algorithm after these experiments were invented in the 1930s. Following his directions one could tally things up and even do check sums without having to think much. That’s what algorithms do—provide a recipe for solving problems.
As an engineer I have a healthy respect for algorithms, but my wife, who works as a preschool teacher, thinks this is geeky. For example, I admired the nerdy professor in the TV show “Numbers” that aired a few years ago. But every time he expounded on some algorithm that ingeniously saw the pattern of a serial criminal, she just laughed. Ironically she is now hooked on a show called “Person of Interest” that is based on predictive policing, that is, using algorithms to calculate a crime to come. That scares me!
According to a new book by Christopher Steiner titled Automate This: How Algorithms Came to Rule Our World (see this Wall Street Journal review) all of us had best be on our guard against seemingly clever ways to systematically solve problems. It seems that the engineers, mathematicians, programmers and statisticians who come up with these numerical recipes invaded Wall Street. They became known as the “Quants”—dominating the way stocks now get traded.
The problem with all this (even I have to admit) is that these systematic approaches to things take all the fun out of making choices. Do we really want algorithms to pick our soul mates, invest our money, etcetera? I am up for algorithms like Yate’s that quickly solve mathematical problems. A good example of this is the first known algorithm recorded on clay tablets in 2500 B. C. that helped Sumerian traders divvy up a given amount of grain equally to a varying number of recipients. However when things become capricious with many unknowns that are unknowable being thrown into the mix, I’d rather make my own decisions guided by wise counsel.
There is an elephant in the room whenever it comes to discussing computer algorithms, particularly highly automated ones. Almost all such algorithms are inaccurate. They are inaccurate for many reasons, the most important of which is that human behavior is fickle. The inaccuracy could be shockingly high.
– Kaiser Fung, author of Numbers Rule Our World
I really shouldn’t bring this up, but do you suppose certain politician might be spending a lot of money on algorithmic solutions to how they can win election? Do these algorithms have any qualms about turning their protagonists into nabobs of negativism? I do not believe that an algorithm has any heart, unfortunately. An algorithm is like Honey Badger—it just don’t care.
How to better your brain to make it think and retain
Buried in my file of fodder for blogs I re-discovered a heads-up from the New York Times on 1/21/11 that giving yourself a quick quiz after studying something once works better than going over and over it. The test-triggered active retrieval promoted meaningful learning by half in terms of how much students remembered a week later.
If you know something, or if you have stored information about an event from the distant past, and never use that information, never think of it, your brain is functionally equivalent to that of an otherwise identical brain that does not “contain” that information.
— Cognitive neuroscientist Endel Tulving quoted in this publication in Current Directions in Psychological Science of research on active retrieval by Jeffrey D. Karpicke of Purdue University
Coincidentally I just read this passage in “Brenner and God” by Wolf Haas, three time winner of the German Thriller Prize, which struck a chord about how the mind works in mysterious ways: “…just like a light that’s too bright can be bad for the eyes, so, too, can a mind that’s too awake be not at all good for thoughts…a half-asleep person can always outmatch an awake person by a long shot, no discussion.”
This happens with me when I am really wrapped up in a writing project or dealing with a very tough problem. Then I cannot sleep well as thoughts keep winding through my head. Often as I am nearly into a dream an answer comes to me. Then the only thing is to get up and write it down in the hopes that next morning it still makes sense. In any case, if I do not make a note, I then cannot sleep for fear of forgetting it. But surprisingly these ideas do usually hold up to the light of day, albeit not always terribly brilliant.
Does this happen to you too?
The next bubble that’s bound to burst: college tuition
I am glad to have graduated the youngest of my 5 children—now self-sustaining in Ohio State University’s biochemistry PhD program. Even taxpayer-subsidized state-school students like her can easily pile up $10,000s in debt for ever-growing tuition. Those going to private institutions are likely to end up with a lot more money to pay back after they complete their studies.
One year ago my high-school classmate Mark Perry, now a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan, warned about a Higher Education Bubble. Under the bombshell blurb “That’s a jump of 1,120%” [from cost of college in 1978], the latest (August 27) issue of Bloomberg Businessweek extends the Bureau of Labor Statistics in Perry’s scary chart to 2012. Given what happened in housing, this is becoming extremely alarming!
Students are paying less and less of direct college costs, relying more on government grants and loans. That has encouraged universities to jack up tuition expenses, fueling a vicious circle reminiscent of the housing bubble.
– David Hogberg, Investors Business Daily
A more graphic illustration is provided via this glimpse at a Broadside by Glenn Reynolds. View his video and weep if you have children heading for college. It’s hard to imagine that this can go on (graduates paying many $100s per month for debt) for much longer. The meager educational-returns on massive investments (loaded into huge debts) just do not seem sustainable.
Random thoughts
Posted by mark in Basic stats & math, design of experiments, Uncategorized on August 26, 2012
The latest issue of Wired magazine provides a great heads-up on random numbers by Jonathan Keats. Scrambling the order of runs is a key to good design of experiments (DOE)—this counteracts the influence of lurking variables, such as changing ambient conditions.
Designing an experiment is like gambling with the devil: only a random strategy can defeat all his betting systems.
— R.A. Fisher
Along those lines, I watched with interest when weather forecasts put Tampa at the bulls-eye of the projected track for Hurricane Isaac. My perverse thought was this might the best place to be, at least early on when the cone of uncertainty is widest.
In any case, one does best by expecting the unexpected. That gets me back to the topic of randomization, which turns out to be surprisingly hard to do considering the natural capriciousness of weather and life in general. When I first got going on DOE, I pulled numbered slips of paper out of my hard hat. Then a statistician suggested I go to a phone book and cull numbers from the last 4 digits from whatever page opened up haphazardly. Later I graduated to a table of random numbers (an oxymoron?). Nowadays I let my DOE software lay out the run order.
Check out how Conjuring Truly Random Numbers Just Got Easier, including the background by Keats on pioneering work in this field by British (1927) and American (1947) statisticians. Now the Australians have leap-frogged (kangarooed?) everyone, evidently, with a method that produces 5.7 billion “truly random” (how do they know?) values per second. Rad mon!
It’s the letter of the law: Stand down with Calibri
Posted by mark in Consumer behavior, Graphics, Uncategorized on August 17, 2012
Twenty years ago or so I cajoled the advertising rep from R&D Magazine into lending me a binder filled with several inches of ‘white papers’ of the publisher’s research on readership. Their data came primarily from A/B (split) testing—not very sophisticated but effective for simple comparisons. One question I resolved was whether to use serif or sans serif font. The research showed significant advantages to headlines being san serif, such as Arial font, and text in serif—for example, Times New Roman. I’ve stuck with that ever since,* except for the fonts themselves changing over to Calibri and Cambria—the defaults in current versions of Microsoft Office software.
However, now I am set back by this news from Wall Street Journal that Calibri comes up short—30 percent to be precise—versus Arial and other common fonts, at least so far as the State of Michigan is concerned. The inventor of Calibri, Lucas de Groot, justifies his type being smaller because of its high readability per square inch. Although this seems plausible to me, I would like to see the research supporting this assertion.
For an interesting detailing of fonts—serif versus san serif and neo-grotesque versus humanist—see this blog by Laurie Israel Think.
*For writings that will likely be read in printed form, that is. Having seen research like this recent study from the JOURNAL OF COGNITIVE PSYCHOLOGY, I believe that words written in a sans serif font provide a significant advantage for messages read on computer screens, such as blogs and email. Thus for these purposes I prefer using Calibri exclusively—ditto for presentations projected on screen, for example—using Powerpoint.
Statisticians no more—now “data scientists”
Posted by mark in Basic stats & math on August 15, 2012
I spent a week earlier this month at the Joint Statistical Meetings (JSM)—an annual convocation of “data scientists”, as some of these number crunchers now deem themselves. But most statisticians remain ‘old school’ as evidenced by this quote:
“Some time during the past couple of years, statistics became data sciences older, more boring sibling that always played by the rules.”
— Nathan Yau*
I tend to agree—being suspicious of changes in titles as a cover for shenanigans. It seems to me that “data science” provides a smoke screen to take unwarranted leaps from shaky numbers. As the shirt sold at JSM by American Statistical Association (ASA) says, “friends don’t let friends extrapolate.”
*Incorrectly attributed initially (my mistake) to Carnegie Mellon statistics professor Cosma Shalizi, who was credited by Yau for speaking up on this subject.
Polysci prof asks “Is Algebra Necessary”?
Posted by mark in pop, Uncategorized on July 29, 2012
I was appalled to see this titular question on the front of today’s (Sunday) New York Times opinion section. It came along with this sidebar quote:
There is no good reason to force students to master quadratic equations. Doing so holds them back.
That really riles me up, seeing as how these polynomials work so well for response surface methods (RSM) for process optimization. The author, Andrew Hacker–emeritus professor of political science at City University of New York, believes that, by making math mandatory, our educational system filters out talented scholars. As an alternative to hard-core number-crunching, he proposes the “exciting courses” in ‘citizen statistics’ such as the Consumer Price Index. His aim is “to treat mathematics as a liberal art, making it as accessible and welcoming as sculpture or ballet.”
I enjoy seeing statues and I admire the grace and athleticism of dancers; however, Hacker’s vision is for me dystopian. But so long as the educational system provides for a branching of those who like math versus the others who do not, then we get the best of all worlds. I agree–let’s not force algebra on those who abhor it.
A strange pink elephant — the Higgs boson
Posted by hank in science, Uncategorized on July 9, 2012
In our business we focus a lot of energy to convince experimenters they must conduct enough runs to develop the statistical power needed for detecting an effect of interest. What amazed me about the recent discovery of the Higgs boson is the sample size required to see this “strange pink elephant” as it’s described in the embedded explanatory video cartoon. The boffins of CERN took 40 million measurements per second for 20 years. These physics fellows cannot be topped for being persistent, tenacious, dogged and determined. Good for them and, I suppose, us.
“If the particle doesn’t exist, one in 3.5 million is the chance an experiment like the one announced would nevertheless come up with a result appearing to confirm it does exist.”
– Carl Bialik, ‘The Numbers Guy’ for Wall Street Journal explaining in his July 7-8 column the statistical meaning of CERN’s 5 sigma standard of certainty (see How to Be Sure You’ve Found a Higgs Boson).
Danube nicely routed through Vienna and Budapest
I’ve just returned from a wonderful conference in Vienna of European and African (plus one Malaysian) Design-Expert® software users. Afterwards I spent the weekend in Budapest. First off I must marvel at the chances of a magnificent river such as the Danube just happening to wind its way through these two great cities, as well as Bratislava and Belgrade—all four being capitals. Surely this fortuitous routing of the waterway evidences a higher power. ; )
My knowledge of the histories of these regions in Austria and Hungary increased many-fold, but of course I must acknowledge starting with a very low denominator on this ratio. The tour of the private quarters of the Habsburg Emperors went far too much into the sad story of Sissi—the beautiful Empress who lived like a beautiful bird in a gilded cage and ultimately died at the hands of an anarchist run amok (he actually meant to kill another royal, but settled for her). See the sordid details here.
The history of Budapest was laid out nicely in a display I stumbled across in the Royal Palace on Castle Hill. Via a series of a dozen or so placards with associated artifacts, this stroll through time told a story of repeated destruction. It starts with the mid 13th century construction of a walled town to fend off the Mongol hordes. Then in another hundred years it continues with the building of a keep by Prince Istvan the Angry (a royal pain—I am sure). After some further hundreds of years the Turks came in and the Turks came out. The story told at the church on the Hill is that their ammunition exploded and a statue of Virgin Mary burst out of the wall that they’d plastered over when converting it to a mosque. This catalyzed the successful end of the siege by Christian forces. Holy Mary! Coming to the 20th century things get even worse with the two world wars and the cold war, which of course resulted in various occupations by unwanted outsiders. But all is good now, I think, other than the armies of Americans and other tourists coming left and right on Viking longboats for four-day forays around the town flinging forints (the Hungarian currency) to the local shopkeepers and restaurateurs. It could be worse!