Facts and Stylized Facts
In Cupboard, I try to list what I think I learned and hold to be a fact or a stylized fact.
A “fact” is something we can demonstrate to be true, at least within the boundaries of our human experience. I expect facts to be uncontroversial and only list them here if they are not obvious to me or were not previously known to me, and/or if I find it useful to register to ensure I do not lose sight of them.
The term “stylized fact,” which I borrow from economists, refers to a simplified account of the evidence, a generalized tendency or observation that may have caveats and not hold true in every observed case, but that will hold true in most cases over space and time. I find this a useful term under which to summarize what I think I learn or know, as long as I am aware that, even these “stylized facts,” may not actually be corroborated by all situations.
I will attempt to classify and score my list of facts and stylized facts based on my understanding of the strength of evidence behind them, using the criteria below.
Certainty Scoring Criteria
| Certainty/ Strength of Evidence Level | Certainty/ Strength of Evidence Score | Criteria |
|---|---|---|
| Absolute | 10 | Facts (ignoring my tendency to sometime question the existence of facts altogether) |
| Strong: statistical evidence | 9 | Randomized control trials |
| 8 | Robust statistical evidence (not necessarily from randomized control trials). For example, from meta-analysis of statistically tested models. | |
| Medium: peer-reviewed expertise | 7 | Thorough (as complete as possible) review of expert peer reviewed literature (not necessarily statistically tested) |
| 6 | Partial (possibly cherry-picked, even if unintentionally) review of expert peer reviewed literature; individual expert peer reviewed publications, whether they consist of all the available literature or not | |
| Weak: non-peer reviewed, anecdotal | 5 | Review of non-peer reviewed literature and/or journalistic reports from “serious” sources |
| 4 | Personal experience and/or other anecdotal evidence | |
| Non-existent | 3, 2, 1 | I won’t be using these scores for anything I post here, not because I don’t believe in things with absolutely no reasonable evidence to support them, but because I don’t think of them as anything I have actually “learned” or “know.” Plus, if anyone visits this site, they’d likely have nothing to gain from them. For a sense of where my lame thoughts and beliefs lie, please see the posts in Kitchen Table. |
List of Facts and Stylized Facts
| Fact/ Stylized Fact | Main Source(s). See “Barn” list for full citations | Knowledge Area | Score |
|---|---|---|---|
| People tend to think through heuristics: acquired expertise, and mental models that are often simplistic, coherent, non-ambiguous, self-reinforcing and that require considerable energy and effort to change | Kahneman (2011) | Cognition | 8-9 |
| Fast, intuitive (heuristic) thinking makes us all susceptible to a myriad of biases such as priming, halo effect, what you see is all there is (WYSIATI) | Kahneman (2011) | Cognition | 8-9 |
| We underestimate the role of chance in assessing the past (WYSIATI). For example, we underestimate a) regression to the mean (extreme events are rare and likely followed by less extreme events); b) that small samples are more likely to generate extreme outcomes | Kahneman (2011) | Cognition | 8-9 |
| What feels good or true is what feels easy | Kahneman (2011) | Cognition | 8-9 |
| Our brains often cannot make decisions without the aid of emotions. The rational and emotional networks in our brains are linked. | Eagleman (2017) | Cognition | 8-9 |
| GDP as a measure of output excludes or underestimates non-market production (e,g, household production, subsistence production, measuring Government services through inputs) and does not always capture changes in the quality of services | Stiglitz et al. (2010) | International Development/ Data Science | 10 |
| The use of GDP as a denominator often misleads people to compare apples (expenditures) to oranges (value added). | See Fan post “Indicators of Government Expenditures” | International Development/ Data Science | 4 |
| Good leaders often need to learn to be better managers and good managers often need to learn to be better leaders. Among other things, this involves learning to balance top-down and bottom-up structures and processes. | See Fan post “Management as a Balancing Act: A Personal Account” | Management | 4 |
| There is evidence that poverty traps exist in certain times and places. Not necessarily in all times and places. | Duflo and Banerjee (2011) | International Development | 8-9 |