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Survivorship Bias

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Re: Survivorship Bias

#201

Post by ctdonath »

frgtpsswrdlame wrote: post #190
ctdonath wrote: post #127

Earlier quoted context omitted.

The mobility is there for the taking, though disincentives are at an all-time high. Welfare benefits are structured (presumably unintentionally) to discourage working: earning about $12/hr plus welfare equals about $36/hr without welfare ... but in between, welfare benefits plummet so fast that trying to work your way up from $12/hr to $36/hr amounts to a huge pay cut. As such many can't or won't make the bridging ef…

I disagree and typed out a bit of a longer refutation but I'm honestly more interested in where our disagreement stems from, I think this question might answer that for me: I'm sure that you know people who have high incomes/lots of wealth and who are smart & hardworking. Do you know any older "poor" people (yearly income bottom quintile <$21,000, second quintile < $41,000) who are the same?

Feel like I'm walking into a trap here.

Myself being near a half-century, I've watched the development of minimum wage, wage-limited welfare, and easy credit. As such, I have to observe that older people (of whatever income) have mostly lived their earlier low-wage years without those two institutionalized traps, managing to work up their income past that $12-36/hr (inflation adjusted) gap before it appeared, and acquired most of what they're going to acquire (non-consumables) with cash or have long paid off major debts. As such, they had more natural socioeconomic mobility, and regardless of income most retired into a scenario where income can be very low while maintaining a quite comfortable existence - ergo pegging them as bottom/second quintile can be quite misleading, as contrasted with the otherwise presumed "growing family" that does desperately need income & mobility.

To wit: those elderly I know who likely have such low incomes likely own their homes etc outright, know how to live well on a frugal income, avoided/eliminated debt, and are in a position to choose to cut their own income to maximize net revenue (extreme ex.: the "millionaire on food stamps" cases, rich but currently no earned income).

Re: Survivorship Bias

#202

Post by backpropaganda »

ryandrake wrote: post #138

I had a professor who had the class stand up and all start flipping coins. If you flipped tails you sat down and stopped. After several iterations he interviewed the last remaining standing person to ask him what hard work he did to become such a good coin flipper, and if he had any secrets about coin flipping success he wanted to share with the class. It was a pretty nice exercise and I think applicable generally to…

This example looks really good at a superficial level, until you dig down into the math. For me to consider someone a really good coin-flipper, he'd have to get at least 10 heads in a row. Even on this measly example, you would need 1024 people in the room to get at least one successful person.

It's reasonable to assume that becoming successful in business requires you to make more than 20 correct decisions, and depending on the level of success, probably closer to 30-50 good decisions, and a population of billions and trillions just to find one successful person.

Conclusion: real life is not just coin flips. If it were, noone would be successful.

Re: Survivorship Bias

#203

Post by aoeusnth1 »

backpropaganda wrote: post #202
ryandrake wrote: post #138

I had a professor who had the class stand up and all start flipping coins. If you flipped tails you sat down and stopped. After several iterations he interviewed the last remaining standing person to ask him what hard work he did to become such a good coin flipper, and if he had any secrets about coin flipping success he wanted to share with the class. It was a pretty nice exercise and I think applicable generally to…

This example looks really good at a superficial level, until you dig down into the math. For me to consider someone a really good coin-flipper, he'd have to get at least 10 heads in a row. Even on this measly example, you would need 1024 people in the room to get at least one successful person. It's reasonable to assume that becoming successful in business requires you to make more than 20 correct decisions, and depe…

How about: success is log-normally distributed, with individual factors, environmental and random factors all ~multiplying together. If you select the most successful people, they are likely to be both talented AND lucky.

Re: Survivorship Bias

#204

Post by ctdonath »

frgtpsswrdlame wrote: post #200
ctdonath wrote: post #198

Earlier quoted context omitted.

It's the proliferation of programs, most of which don't write checks to the individuals but do provide generous coverage & subsidies. EBT (aka "food stamps"), health insurance, "Section 8 housing" ("right" to rent in upscale neighborhoods with capped cost), etc all add up. Details are out there, often reported. https://downtrend.com/robertgehl/welfare-payouts-top-20-per-... http://nypost.com/2013/08/19/when-welfare-p…

If your problem with welfare is that it should have no drop off points, what makes that the product of a "deeply misguided, sociopolitical philosophy"? It seems to me more like a problem created by the fumblings of a bipartisan beauracracy.

Welfare should absolutely not be structured to cut one's net revenue when one makes the effort to earn more.

Methinks welfare, as currently implemented, serves the "something must be done!" industry. Many would work themselves out of a job if "poverty" were eliminated as their goal states, so they keep redefining "poverty" and solving it in ways that generate more of it. The operative philosophy indicated simultaneously addresses manifestations of poverty (via income supplements, rent controls, food subsidies, free services), and aggravates the causes (prohibition of low income[1], strict zoning laws, costly food regulations with diminishing/marginal benefits, undermining low-cost services).

Admittedly, a bipartisan system which simultaneously treats government as the solution to, and the cause of, poverty is really going to screw things up.

[1] - I find "minimum wage" the modern equivalent of "debtor's prison": if you can't produce enough value, you're prohibited from producing any value at all.

Re: Survivorship Bias

#205

Post by backpropaganda »

aoeusnth1 wrote: post #203
backpropaganda wrote: post #202

Earlier quoted context omitted.

This example looks really good at a superficial level, until you dig down into the math. For me to consider someone a really good coin-flipper, he'd have to get at least 10 heads in a row. Even on this measly example, you would need 1024 people in the room to get at least one successful person. It's reasonable to assume that becoming successful in business requires you to make more than 20 correct decisions, and depe…

How about: success is log-normally distributed, with individual factors, environmental and random factors all ~multiplying together. If you select the most successful people, they are likely to be both talented AND lucky.

Sure. Talent is a function of luck too. I'm not denying the role of luck. Just saying that someone who made it big is not following a random policy, and that imitating their behaviour might help you too.

Re: Survivorship Bias

#206

Post by MagnumOpus »

backpropaganda wrote: post #205
aoeusnth1 wrote: post #203

Earlier quoted context omitted.

How about: success is log-normally distributed, with individual factors, environmental and random factors all ~multiplying together. If you select the most successful people, they are likely to be both talented AND lucky.

Sure. Talent is a function of luck too. I'm not denying the role of luck. Just saying that someone who made it big is not following a random policy, and that imitating their behaviour might help you too.

If talent counts as luck, everything does. Maybe you mean that talent is also outside the individuals purview?

In the context of predicting success it does not make sense to put talent - or other non-changeable initial endowments like country of birth, parental wealth, attractiveness - into the "luck" bucket. While you can't do anything about these factors, an accurate assessment of them will tell you a lot about your chances of success in a given domain.

I.e.: you might need all three of exceptional talent, hard work and luck to succeed in an endeavour - and while luck might be random, and "hard work" can be influenced by yourself, the talent factor can be gauged but cannot be influenced so it can be a hard limit that should guide you in the path you take. I.e. you don't dedicate your life to being a supermodel if you were born butt-ugly, or to be an NBA player if you are 5 feet tall. You might succeed, but your chances are microscopic.

Re: Survivorship Bias

#207

Post by aaron695 »

vog wrote: post #165

That's strange. Such a huge discussion here on HN, but very few explaination and discussion on ExplainXKCD: http://www.explainxkcd.com/wiki/index.php/1827 Is this because people prefer discussion threads over collaborating in a wiki, or is this because ExplainXKCD is not as widely known as it should be?

ExplainXKCD has lost the plot, which is a shame it was quite good.

Re: Survivorship Bias

#208

Post by cyberpunk »

treyfitty wrote: post #187

I grew up relatively poor (I think my parents were on welfare at one point, but they would never tell me). I studied hard in college, got a good job afterwards, and now enjoy a very middle class life, which is rare considering my many friends + acquaintances from the same upbringing are struggling. Relatively speaking, I am "successful" all because I studied hard. The details in between are important in the discourse…

I think luck is a bit overstated there.

Sure, sometimes an opportunity appears through some random chance which later on we might feel is lucky; if you were able to actually do that job, or deliver on whatever chance appeared then luck did little more than open the door.

If you're good enough, or hard working enough, a chance will usually appear. Don't dismiss an achievement as just being "luck" -- it was earned (I sure did)..

You're lucky if you pick a winning lottery ticket. You do well on a job or a opportunity? That's because you worked to be able to exploit the chance, not because you got lucky to get offered it.

Re: Survivorship Bias

#209

Post by 5ourpu55 »

Of course, people come out of the woodwork to say that "Hey, it's not THAT hard! All I had to do was work hard and everything worked out!" while ignoring the privilege / wealth / community they were fortunate enough to grow up in.

Even having the OPPORTUNITY to achieve is a massive amount of privilege.

Grow up poor and talk to me about coin flips. Have a lazy alcoholic chain smoking father and talk to me about coin flips. Be sexually abused for years on end and tell me about surviviorship bias.

Have your parents asking you for loans because you are the only person in the family making any money, instead of your parents being a source of stability in your life, and talk to me about coin flips.

Basically be total trash surrounded by the extremely privileged developer community and talk to me about how hard work and dedication pays off.

The coin flips are more than just you running your business and the thousands of hours you've put in. It's the environment you've grown up in, it's your wealth and stability, it's the early education you were lucky enough to receive, it's knowing that if it all goes to hell you can always crash on your parents couch and get a job doing something similar somewhere else. Not all of us won that coin toss. ;D

Re: Survivorship Bias

#210

Post by taneq »

gk1 wrote: post #97
ux-app wrote: post #72

Earlier quoted context omitted.

>Not compared with the loads of stories of people who worked hard, improved themselves, and still don't earn anywhere near $1M/yr The vast majority of single digit millionaires are doctors, lawyers, construction company owners. I've even personally met a factory worker who retired with > $1mm in savings due to prudent money management (no lottery wins, just basic financial management for 30+ years). I live in a compl…

You may like reading The Millionaire Next Door. It explains that the majority of millionaires in the US are like those you describe, and not like the flashy movie ones we see in the media. Edit: Link for convenience: https://www.amazon.com/Millionaire-Next-Door-Surprising-Amer...

The bar for 'millionaire' is significantly lower than it once was. Inflation, combined (in some markets) with huge raises in property values, basically means that anyone who's paid their house off is likely to qualify.

A total net worth (including real estate etc.) of more than a million dollars doesn't imply that someone's particularly wealthy the way it once did.

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