Monday, November 28, 2005

Freaky Economics revisited

A salient point in my encounter with Lord's paradox is that multiple regression can easily mislead if the data is not represented properly . It seems that our favorite economist Steve Levitt has been rebutted at least in part because he failed to adjust certain inputs in his regression. The Wall Street Journal reports that two economists from the Federal Reserve recalcuated Levitt's regressions, this time adding a few additional variables to account for variations in crime. They also normalizing arrests to be per capita. The Journal reports that Levitt's finding that abortion reduces crime is greatly exaggerated. Are we suprised? I think the whole thing is a post-hoc fallacy.


At 10:24 AM , Blogger Dean Foster said...

Let's get the data and have a look. I tried, but failed to find it. The Journal says he shares it.


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