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Financial analysts have been known to use "survivor bias" to mislead potential clients by the use of statistics that demonstrate the benefits they would have enjoyed had they previously invested in their currently recommended portfolio - thus drawing attention away from previous recommendations that had been withdrawn because they had done badly. Another example of survivor bias in the interpretation of financial statistics was study of financial returns which covered only firms existing at the end of the period under review, thereby excluding those that had failed in the interim, that showed shares to have earned a return of 8.8 percent when the true return had been3.8 per cent<ref> Dimson, Marsh and Staunton: ''The Millenium Book: a Century of Investment Returns'', ABN Amro, 2000</ref>. | |||
Survivor bias has also marred studies of medical treatment that have used samples in which patients who died early were under-represented<ref>[http://www.annals.org/cgi/content/full/125/11/941-a Marshall J. Glesby, and Donald R. Hoover: ''Bias in Observational Studies of Treatment'', Annals of Internal Medicine, 1 December 1996 | Volume 125 Issue 11 | Page 941]</ref>. | |||
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Revision as of 06:41, 14 January 2010
Financial analysts have been known to use "survivor bias" to mislead potential clients by the use of statistics that demonstrate the benefits they would have enjoyed had they previously invested in their currently recommended portfolio - thus drawing attention away from previous recommendations that had been withdrawn because they had done badly. Another example of survivor bias in the interpretation of financial statistics was study of financial returns which covered only firms existing at the end of the period under review, thereby excluding those that had failed in the interim, that showed shares to have earned a return of 8.8 percent when the true return had been3.8 per cent[1].
Survivor bias has also marred studies of medical treatment that have used samples in which patients who died early were under-represented[2].
- ↑ Dimson, Marsh and Staunton: The Millenium Book: a Century of Investment Returns, ABN Amro, 2000
- ↑ Marshall J. Glesby, and Donald R. Hoover: Bias in Observational Studies of Treatment, Annals of Internal Medicine, 1 December 1996 | Volume 125 Issue 11 | Page 941