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Neil Raden

I hope that you will engage with me with your comments as we explore the future of business intelligence (BI), particularly its expanding role in the actual process of making decisions and running an organization. BI is poised for a great leap forward, but that will leave a lot of people and solutions behind so expect a bumpy ride. I also expect there will be a flurry of advice and methodologies for moving BI into a more active role, one that will widen the audience as BI meets more needs. But a lot of that advice will be thin and gratuitous, so hold on while we put it under the microscope. You can reach me directly if you prefer at nraden@hiredbrains.com.

About the author >

Neil Raden is an "industry influencer" – followed by technology providers, consultants and even industry analysts. His skill at devising information assets and decision services from mountains of data is the result of thirty years of intensive work. He is the founder of Hired Brains, a provider of consulting and implementation services in business intelligence and analytics to many Global 2000 companies. He began his career as a casualty actuary with AIG in New York before moving into predictive modeling services, software engineering and consulting, with experience in delivering environments for decision making in fields as diverse as health care to nuclear waste management to cosmetics marketing and many others in between. He is the co-author of the book Smart (Enough) Systems and is widely published in magazines and online media. He can be reached at nraden@hiredbrains.com.

I may be a little late getting around to Freakonomics by Levitt and Dubner, but there are some issues related to the book that should concern us. Everyone cheats, there is a relationship between the Ku Klux Klan and real estate agents, why drug dealers live with their mothers or how abortion lowered crime - these make for entertaining reading. But when it came to the negligible effect of good parenting, my radar went up.
 
At the end of the book, there is a short section about Two Paths to Harvard. Why is it always Harvard, by the way? Why is that the exemplar for academic achievement? It's as if going to any of the other hundreds of great schools is like being the runner-up bitch at the Westminster Dog Show. But I digress. To demonstrate their thesis that Freakonomics shows that parenting isn't the strongest determining factor in achievement, they compare two boys. One is an African-American boy born in Daytona Beach, Florida, whose mother deserted him when he was two and his abusive, alcoholic father who was finally locked up when he was twelve, leaving him on his own to join a gang and sell drugs. The other was born in an upper-middle class suburb of Chicago to loving, well-educated parents. It turns out they both went to Harvard, the former now a professor there. The boy from Chicago did OK at Harvard, but things eventually went sideways. His name is Ted Kaczynski, a.k.a. The Unabomber.
 
So what is the point of this? Two observations hardly make for rigorous analysis. Besides, Ted Kaczynski is schizophrenic. It has nothing to do with the variables observed and analyzed. And that's the whole problem with "economic" models - you can never know if you are looking at the right variables and or truly understand cause and effect. This is the whole idiotic idea behind Cheerios protecting your heart, an extrapolation of a tentative conclusion of a slew of flawed "medical" (statistical not physical) studies. So if I want to know whether to stock more blue or more red shirts in my store, fine, lets try to understand our market. But if we want to understand the economic impact of wretched people having children, we don't need a model. If we're a government regulating false advertising, we don't need a model to inform us that Cheerios will not protect us from heart disease, especially the implication that that is the ONLY thing we need to protect our heart.
 
I love statistics, I built statistical models myself at many points in my career. But for heavens sake, lets not delude ourselves that we can use models for real life or death issues like public health or the sociology of child rearing. Models can give us insight (or mislead us), but every counterintuitive result has to be examined rigorously and not taken at face value.
 
Freakonomics was interesting, but not very useful.

Posted May 20, 2009 3:18 PM
Permalink | 1 Comment |

1 Comment

I heartily agree with you. The book is amusing but not really all that useful.

Another point: It claims to apply economics to Everything, but actually has a quite limited scope. In fact, it's mostly about poor urban black Americans, with a few obviously connected outliers.

I was also a bit put off by the blurb at the beginning of each chapter that celebrates the author as a great, but sadly misunderstood genius. On the other hand, maybe I should use that gimmick more often myself.

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