Op Ed on junk economic estimates August 22, 2011
Posted by Paul Duignan in : Uncategorized , add a commentI’m back blogging now. As an outcomes specialist, I’m always irritated when I see people making what I think are junk estimates. There’s a lot of this going on in economics from the Credit Rating agencies underestimating the risk of junk bonds through to various estimates plugged into all sorts of cost-benefit and other economic analyses that I see from time to time.
One I got my teeth into recently in an Op-Ed I wrote is an estimate regarding the cost of one of the many after-shocks which struck Christchurch NZ in its recent sequence of earthquakes. In this case, an estimate was made of one set of aftershocks which did not seem to take into account the fact that many of the buildings damaged in the after-shock had already been damaged in the earlier earthquakes. As one commentator said, ‘there are only so many times you can write off a building’!
This estimate was shot down by many people when it arose but the problem with junk economic estimates is that they tend to keep popping up like zombies like this one did in at a later date, but without the original criticism which put it in perspective. Anyway, check out the Op-Ed at http://www.outcomescentral.org/files/duignan299quake.pdf.
Paul Duignan, PhD. (Follow me on my OutcomesBlog.org; Twitter; or via my E-Newsletter; many resources at OutcomesCentral.org