Anecdata

Quantitative people usually treat anecdotes with disdain, but more for sociological than statistical reasons.

There’s a saying that “the plural of anecdote is not data”. Funnily enough, it started out without the not, which makes more sense, for what is an anecdote if not a datum? But it was important for economists to distinguish their ideas from the just-so stories of other social scientists, and so the not stuck.

There is something to the hostility, though. One datum should generally not affect your estimates by much. So if you’re trying to work out the national inflation rate, it’s not worth paying attention to your cousin’s complaints about how they’re paying more for broccoli now. Just let the government statisticians do their job of aggregating the millions of price points.

The problem is that most quantities you’re interested in aren’t like that. Want to know if we’re going into a recession? You could wait for the NBER, which will tell you a year after it’s happened. Or you could ask a friend in a volatile industry like consulting if she’s finding work. Mathematically, if what you want isn’t being collected at the right time or in the right level of detail, then one point can and should make a big difference to your estimates.

Using these anecdata is tricky, particularly if you take Bayesianism seriously. For just one example, how do you deal with selection bias, where you’ll hear about successes more than failures? But there’s no reason not to try.

Advertisements

One Response to “Anecdata”

  1. Essexman Says:

    One’s none, two’s some, three’s a little hundred …

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: