In 1951 Edward Simpson published a paper discussing the interpretation of contingency tables. He discusses a phenomenon that is still occurring in today’s statistics. It is called after his own name, Simpson’s Paradox. An Example Simpson’s Paradox can be explained with a simple example. Suppose we are developing a vaccine to prevent a deadly virus from killing people. After years of research, we have finally found a vaccine that could work. Before it can be distributed across the world, it has to be tested first. To keep this example very simple, suppose that there are […]

12 oktober •
Door
Sam Ansari
• Estimated reading time: 5 minuten

Predicting the future is a hard concept to grasp. That is why this article aims to discuss some daily applications of predictions and dives a bit in to the world of forecasting.

In statistics we are often estimating parameters and then, using some hypothesis test, we can find out if we should either reject our null hypothesis or not. Now in these tests we almost always rely on some known distribution of a so-called test statistic. Let us start by looking at an example of such a test. We will first need to assume that our sample follows a normal distribution with a known variance. Now we want to test if the mean of this normal distribution is equal to . Hence, we conduct the following test: […]

One of the most popular regression methods an econometrician learns is the Ordinary Least Squares (OLS). It is a simple and elegant way of estimating parameters in linear regression. However, there is another technique to perform linear regression using concepts from machine learning. This concept is called gradient boosting and is also related to decision trees. Decision trees A decision tree uses a tree-like model of decisions and possible consequences. It is a very common data mining algorithm used for operations research, specifically in decision analysis. The idea behind it can easily be understood […]

23 februari •
Door
Sam Ansari
• Estimated reading time: 10 minuten

Testing has been quite a significant subject during this pandemic. Around 30.000 people a day are being tested in the Netherlands alone, so it is quite important that such a test can accurately predict whether someone actually has the disease. However, an accurate test is not always as predictive as you would like. This phenomenon is also known as “the medical test paradox”. Bayes’ rule The medical test paradox is an example that is quite often used to introduce Bayes’ rule. In Bayesian statistics, the interpretation of probability is expressed as a degree of […]

07 januari •
Door
Sam Ansari
• Estimated reading time: 7 minuten

Nowadays, research in many fields involves statistics. Whether it comes down to a government’s decisions on measures fighting a pandemic or the Red Bull formula 1 racing team deciding on whether Verstappen should swap tires in the next lap, it sounds like a good idea to back the decision with statistics. For a fair amount of time, appliance of statistics has seemed one of the most irrefutable means of proving a claim or, in other situations, coming to the right conclusion. In their essence, statistics seem, when employed properly, to be telling the story as-is, […]

15 december •
Door
Pieter Dilg
• Estimated reading time: 5 minuten

The Lotka-Volterra model is mostly referred to as the predator-prey model. This model is used to describe lots of commonly encountered ecological processes. One of the more famous ones is the rabbit and the fox model. This is a cyclical relation between the amount of rabbits and foxes. More on this will be explained further on. In economics, we also encounter lots of cycles and that is why another application of this model could find a place in economics. Therefore, the Lotka-Volterra equations are potentially very useful in such an economic setting and may be […]

Data has become extremely valuable to many companies in the world. Huge data centres are being built to cope with the vast amount of it that is being transmitted every single second. Especially with the rise of AI and specifically machine learning, this information can be used to build models that can predict future outcomes with phenomenal accuracy. These techniques could also be very powerful when we want to predict stock markets. However, stock prices can be very volatile and investor sentiments can influence these prices as well, so how accurate are these machine learning […]

27 oktober •
Door
Sam Ansari
• Estimated reading time: 8 minuten

When you were still a little child, you were probably told that all babies were delivered by storks. Later, when you got older, you found out that this idea is total nonsense. However, imagine that you are still in doubt whether this idea is true, and to discover the truth, you want to use your statistical abilities. As it turns out, from a statistical point of view it seems that storks really do deliver babies. Or does it not? Robert Matthews In the year 2000, Robert Matthews, professor at Aston University, published an academic paper […]

15 oktober •
Door
Stan Koobs
• Estimated reading time: 3 minuten

Every now and then, in the news you hear a new term. For me that was the term ‘stock split’. Apple and Tesla both went through a so-called stock split last month, but what does this mean for the shareholders? And what about the companies themselves? In this short article I will try to answer most of these questions and provide some other relevant information about stock splits in general. What is an example of a stock split and how does it work? So first I will try to make the concept of a stock […]

It is the spring of 2021. A vaccine for Covid-19 has been distributed and life is getting back to normal. The weather is improving and it is the so-called first ‘Rokjesdag’. The perfect day to hit the terrace with your friends. You are enjoying a drink with your friends, while reminiscing all the good times you had together before the pandemic. You mention that it is quite remarkable that even though you could not really spend time together, you still kept in contact with each other. One of your friends responds that it is only […]

22 september •
Door
Jochem Hak
• Estimated reading time: 6 minuten

A lot of different opinions circulate through society about the ongoing corona crisis. One thinks that the government imposed ridiculous measures, another believes that the government is being far too lenient and maybe you feel that it is fine this way. Even among researchers, there is still a lot of dissension. Where does this radical difference of opinions come from if everyone has the same data? Motivated reasoning Obviously, fighting the coronavirus is a complex problem and therefore, there is not one simple solution. However, this polarity among experts in the field can partially be […]

01 september •
Door
Stan Koobs
• Estimated reading time: 6 minuten