Monday, June 11, 2012

Simpson's paradox. Creativity of AZ


Data manipulation and misrepresentation is very powerful weapon for convincing of investors, agencies, clients and customers. One of the tricks is Simpson's paradox:

In probability and statistics, Simpson's paradox (or the Yule–Simpson effect) is a paradox in which a correlation present in different groups is reversed when the groups are combined. This result is often encountered in social-science and medical-science statistics, and is particularly confounding when frequency data are unduly given causal interpretations.

Here (and here) is a description how AZ used this paradox. Big money on the stake – and it stimulates AZ's statistical creativity!

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