Statistical Adjustment

in LeoFinance2 months ago

the term adjustment may sound manipulative but in a lot of cases statistical adjustment makes perfect sense what if you have to choose between two surgeons and know that 4% of surgeon AIDS patients die during or shortly after their surgery were asked for surgeon beat that percentage is just 3% your first reaction promptly choosing surgeon B is suboptimal a wiser approach would be asking for more data what if surgeon B only accepts young patients whereas surgeon a generously accepts anyone believe it or not surgeon a's death rate might actually be lower than surgeon b's for young people but because he also accepts elderly patients the percentage of deaths goes up it therefore makes sense to adjust for let's say age in our case and after doing that you might realize that surgeon is age adjusted percentage is actually lower the same way so called seasonal adjustment is necessary in a lot of cases just think about your behavior as a consumer before Christmas for example if a statisticians from another planet who doesn't understand humans sees how retail sales have gone up dramatically in December compared to the previous months he might assume our economy is about to skyrocket however when January and February come along he realizes he was way too optimistic another popular option is adjusting for inflation or if you will calculating the so-called real value this makes sense because hey maybe a country's GDP measured in its local currency grew by 20% last year which sounds great but if the inflation rate was 30% yeah not so great all in all statistical adjustment basically enables us to see beneath the surface