Friday, October 12, 2007

Hedge Funds, Abortions, and Bad Math

I hate dumb studies.
One in five pregnancies worldwide and one in three pregnancies in Europe ends in abortion, according to a new study published in a special female-focused issue of the Lancet.

The study also found that, on average, 90 percent of women worldwide will have an abortion before the age of 45, based on 2003 data. However, many women will have had multiple abortions and many none at all to come to this average.

Although the statistics may seem startling, worldwide rates of induced abortion actually fell 17 percent from 46 million to 42 million between 1995 and 2003.
The bold part is idiocy. You can't "average" women with multiple abortions with women with no abortions and come to a percentage of women who have had abortions!! Using that mathematical model, if 1 out of every 10 people eats 12 pieces of cheese a day, then 120% of people eat a piece of cheese every day.

If 30% of women in the US and Europe have abortions, and on average have three in a lifetime, that means 30% of women have abortions. Not 90%.

How can people who are this bad at math do statistical studies?! I hate dumb people.

Elsewhere, this is an excellent article regarding the pricing of investments that aren't traded on the open market, and how difficult it can be to do so. The variance in how investment companies, brokers, and funds price these securities can have huge impacts on the market. The problems the market is having isn't just from "subprime" mortgages, but how investors in those mortgages priced them.

Note: One of the responsibilities I'll have this coming year is pricing these things. Fascinating, fun, and freaking impossible.

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