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Rekenthaler Report

Statistical Illusions

Two common sources of confusion--base-rate neglect and regression to the mean.

Following the Numbers
You perhaps have seen The Wall Street Journal’s takedown of Morningstar's ratings systems, which appeared last week. That criticism, understandably, roiled Morningstar's powers that be, who promptly published two responses.

This article expands on the second of those commentaries, from Don Phillips. I recommend that article for those who wish to follow the WSJ-Morningstar quarrel. However, neither it nor the Journal's original piece are required reading for this column, which concerns general issues about interpreting statistics.