So Barry Ritholtz has also noticed the rising trend of economists who embarrass their profession via “provocative” “studies” which fly in the face of real world experience.
Much of investing relates to mathematics and the application of statistics. Markets are statistical data generating machines, and that data can be sliced and diced in a myriad of ways. We always pay close attention whenever we see an interesting application — or misapplication — of quantitative data that may be instructive or applicable to investing.
So I was particularly intrigued by a study in today’s NYTime’s OP-ED page that purported to look at the impact of steroids on the performance of Baseball players, based on the Mitchell Report. They asked the question: “In a complex team sport like baseball, do the drugs make a difference sufficient to be detected in the players’ performance records?”
Their conclusion? The authors of More Juice, Less Punch found that Steroids, Human Growth Hormone and the like do not have a net benefit to major league players. Based on their review of pre- and post- steroidal usage, the overall impact on players stats was de minimus. (sic)
I remain unconvinced.
Ever since Freakonomics became a runaway economics best seller, there seems to be increasing attempts by “rogue economists” and others to discover the hidden, counter-intuitive side of everything.
Remember that by far the main reason Freakonomics was cited in the media was the “strong causality” Levitt inferred between Romanian abortion and crime rates. I’m sorry, but anybody who thinks they can infer any hidden causality between two society-wide effects 15-20 years apart is just being an idiot.
I am getting so sick of “startling” academic studies. Seriously, these people believe that steroids offer “no net benefit” to the baseball players. Intelligent, vaguely streetwise academics need to start tearing this garbage apart instead of letting some publicity hounds tarnish the profession.