It’s not. Not for the Average Appraiser Bear. In elementary school and high school level, what is taught are “the two types of statistics.” One is descriptive statistics, the other is inferential statistics. Descriptive statistics are used to describe, to summarize, or characterize a data set, so the human mind can understand rows of numbers. […]
Statistics are infernal for a few basic reasons. Misuse of words. Using different meanings at different times. (Like ‘infer’); Assume a clever tool will give you a clever answer (like regression); The fallacy that inferential statistics works without random sampling; The worst fallacy that regression is always based on an inferential sampling process. Let’s look […]
Why is it so easy? Why is it so hard? [Author’s Note: At last year’s joint AI and AI Canada conference in June, 2017, in Ottawa. my talk was titled, Common Regression Errors and Mistakes.] Regression is nothing but a mathematical formula. How can it be wrong? Not all that complicated actually – find the slope […]
Appraisal Myths, Fallacies, and Foibles, #1 is the first in a series. Hype vs Reality: Adjustments and Comps – is the title of my talk on August 4th, 2017, for the Northern California Chapter of the Appraisal Institute. In preparing for this talk, it came to me that much of our discussions revolve around how […]
In our second fallacy, we begin with a question: have you noticed how a new thinking context reveals weaknesses in the traditional appraisal process? The new thinking context is that of data science. Data science reflects dramatic evolving changes. The cause is simple, but twofold. First is the availability of market data. Second is the […]
Sez the “anti-statistics” guy! Statistics has been touted as an appraisal tool for a while. For many years, while heavily involved in the Appraisal Institute, I became a statistical evangelist and people would run from me. I’d come to believe that there was a gap in appraiser education. I presented a (relatively unnoticed) paper for […]
Most of us grew up learning two types of statistics — descriptive and inferential. Descriptive statistics provide summaries of any group, like the mean, the median, the range, the variance. It only got hard when we had to square a bunch of numbers, add them up, and then get out a slide rule (prior to […]
Major challenges exist within our appraiser education given the dramatic changes in technology. These challenges include appraisal standards, our basic and advanced education, and some claims by software providers. A quick overview: Subjective acceptability in standards; Inferential assumption in curriculum; Regression coefficients all over the place. Subjective acceptability. Many consider appraisal to still be […]
Why do we put “stats”, “graphs”, and “data science” together? (Part I of VI parts.) In coming blogs, we’ll look at each of these four words separately. Today (part I) we look at the whole for its parts. We use this principle of the scientific method: take a problem apart into smaller parts, study the […]
Stats can be troublesome. Knowing the why, the what, and the how of statistics can help rescue the appraisal profession. Continued misuse and misunderstanding will help bury it. Let’s look at these three questions. We look at misused words, statistics, and the opportunity. First: “The main problem with statistics is words.” Statistics is the study […]
Statistics for appraisers started to become a hot topic some 15+ years ago. I was more involved with the Appraisal Institute then, and often argued that with the changes in data sources—appraisers would have to learn to apply statistics. Around 2003, the AQB (Appraiser Qualifications Board) revised qualifying education to include the requirement for Finance, […]
Inference is defined as a conclusion reached on the basis of evidence and reasoning. I have often said the biggest problem with statistics is words. (The very word statistics is used in more than one meaning – often in a misleading way.)[1] So what is logical inference, and how is it different from statistical inference? […]
Why should I care about statistical stuff? Appraisal says: Pick some comps, compare, reconcile, and give a number. No statistics there. Data science says let the market pick the data, predict, and provide a reliability score. Traditional appraisal and modern data science have the same goal: help make decisions by analyzing data. Statistical thinking is […]
No computer can replace my expert judgment and experience! We’ve heard words like this. And there is a contingent of “quants” who rely on a high level of competence in quantitative methods, which may include statistics, machine learning, and artificial intelligence. Each expert type has a hammer. And each is right in their own way. […]
Statistics is a necessary part of modernized valuation, and it is very much misunderstood. The main problem with statistics is words! First, let’s get one word out of the way – A parameter is a summary number of any data set, such as mean, median, maximum, minimum, range, quantile, or variation (standard deviation). We use […]