I'm looking for predictive economic models out in the open. I want to see the underlying assumptions and experiment. I'm not even picky about the kind of model: it could be a relatively simple linear regression model, a systems dynamics model, a complex simulation, or anything in-between. I just want models to a focal point of discussion rather than some poorly-explained textual interpretation. I know... I'm asking f…
I was hopeful ~5-10 years ago with the rise of data science, but I don’t know how much this growth corresponded with decision makers using the models both broadly and in intellectually honest ways.
There are areas where the results seem clear; e.g. advertising and product-specific decision points, such as recommendation engines.
Beyond these short-term ML applications, there are other domains where modeling is essential: weather forecasting, politics, markets, economics. But this is just the tip of the iceberg.
Here is a metric I’m interested in: what percentage of decisions are informed by quantitative models?
Aside: Before you complain that e.g. “some decisions aren’t impactful enough to warrant a model-backed approach”, let me say that I sort of agree, but… There are indeed lightweight quantitative models (or at least processes) that can track / predict when using a heavier model is worth it!
I don’t have systematic data on this; it is just a hunch, inspired by what I have heard and seen.
Why? Effective modeling provides differential advantages.
-intra-organizational diffusion: technically savvy people will rise into management.
- inter-organizational dispersion: techniques used by winners will spread across organizations and industries.