I came across this while researching a report I have to present on Complementary and Alternative Medicine for an upcoming conference. Please, enjoy the reference, if it is interesting to you. Please, if you can, refrain from jumping down my throat if you are in a cranky mood.
mm
Regression fallacy
The regression (or regressive) fallacy is a logical fallacy. It ascribes cause where none exists. The flaw is failing to account for natural fluctuations. It is frequently a special kind of the post hoc fallacy.
Explanation
Things like stock market prices, golf scores, and chronic back pain can fluctuate naturally and may regress towards the mean. The logical flaw is to make predictions that expect exceptional results to continue as if they were average. (See representativeness heuristic.) People are most likely to take action when variance is at its peak. Then after results become more normal they believe that their action was the cause of the change when in fact it was not causal.
The word 'regression' was coined by Sir Francis Galton in a study from 1885 called "Regression Toward Mediocrity in Hereditary Stature". He showed that the height of children from very short or very tall parents would move towards the average.
Examples
When his pain got worse, he went to a witchdoctor, after which it subsided a little. Clearly, he benefited from the witchdoctor's powers.
The pain subsiding a little after it has gotten worse was more easily explained by regression towards the mean. Assuming it was caused by the witchdoctor is fallacious.
The student did exceptionally poorly last semester, so I punished him. He did much better this semester. Clearly, punishment is effective in improving students' grades.
Often exceptional performances are followed by more normal performances, so the change in performance might better be explained by regression towards the mean. Incidentally, test have shown that people may develop a systematic bias for punishment and against reward because of reasoning analogous to this example of the regression fallacy.
references available on request....
Regression Fallacy
Started by
maineman
, Mar 23 2007 01:57 PM
5 replies to this topic
#1
maineman
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maineman
#2
hamakua
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Posted 23 March 2007 - 02:46 PM
No post
Edited by hamakua, 23 March 2007 - 02:47 PM.
#3
selecto
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Posted 23 March 2007 - 02:56 PM
Hi, Maineman: Along those lines, this is one of my favorites:
Primitive man soon discovered that it was possible to end an eclipse by beating on a hollow log.
#4
James Quillian
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Posted 23 March 2007 - 07:15 PM
I came across this while researching a report I have to present on Complementary and Alternative Medicine for an upcoming conference. Please, enjoy the reference, if it is interesting to you. Please, if you can, refrain from jumping down my throat if you are in a cranky mood.
mm
Regression fallacy
The regression (or regressive) fallacy is a logical fallacy. It ascribes cause where none exists. The flaw is failing to account for natural fluctuations. It is frequently a special kind of the post hoc fallacy.
Explanation
Things like stock market prices, golf scores, and chronic back pain can fluctuate naturally and may regress towards the mean. The logical flaw is to make predictions that expect exceptional results to continue as if they were average. (See representativeness heuristic.) People are most likely to take action when variance is at its peak. Then after results become more normal they believe that their action was the cause of the change when in fact it was not causal.
The word 'regression' was coined by Sir Francis Galton in a study from 1885 called "Regression Toward Mediocrity in Hereditary Stature". He showed that the height of children from very short or very tall parents would move towards the average.
Examples
When his pain got worse, he went to a witchdoctor, after which it subsided a little. Clearly, he benefited from the witchdoctor's powers.
The pain subsiding a little after it has gotten worse was more easily explained by regression towards the mean. Assuming it was caused by the witchdoctor is fallacious.
The student did exceptionally poorly last semester, so I punished him. He did much better this semester. Clearly, punishment is effective in improving students' grades.
Often exceptional performances are followed by more normal performances, so the change in performance might better be explained by regression towards the mean. Incidentally, test have shown that people may develop a systematic bias for punishment and against reward because of reasoning analogous to this example of the regression fallacy.
references available on request....
I like this kind of stuff.
Let me add a couple of thoughts.
How can a price have a regress toward a mean when it is the latest sequences of data that determine what the mean is?
Laws of physics can only be loosly applied to social phenomena. Regression studies work a lot better in the hard sciences.
#5
TradeMark
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Posted 24 March 2007 - 09:06 AM
Remids me of the great "global warming" hoax.
TM
#6
maineman
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maineman
Posted 24 March 2007 - 09:34 AM
"Let me add a couple of thoughts.
How can a price have a regress toward a mean when it is the latest sequences of data that determine what the mean is? "
Q, I agree with you in the question. I am not a mathemetician, but have forwarded your question along with some other thoughts I had about this to a friend who is one of the top physicists in the world. Without mucking up the answer, it probably does not apply to absolute numbers, in the strict sense. For instance, a companies earnings can just go up year after year, so the absolute number may not regress to the mean, but some other principle may apply, such as "rate of growth" or "earnings as a percent of productivity"... etc. will pass on the answer if he has one.
I found the principle very apt re: medicine and so-called "alternative" stuff. All the vitamin takers, herbalists, purgers, fasters, colon cleaners, chanters, etc.etc. are at succumbing to this fallacy. In standard medicine I use the principle in a so-called "dishonest" way regularly when I tell a patient to go home, drink plenty of fluids and drink chicken soup when they have a viral illness, because I know no matter what they do they'll get better. Likewise, I try to advise those who will listen that their home remedies, some of which can be expensive or risky, aren't worth it (mega dose vitamin C, "Nyquil", and other OTC junk for example). Sadly, medicine is driven more and more by ill-informed patients these days, so all too many demand therapies that are not necessary, based on past experiences (Like antibiotics for "colds") and doctors are under great economic pressure to please those patients. Sad.
Finally, I was really struck by how much we, who use technical analysis, must fall under the illusions we create in our minds regarding chart reading, as it relates to this "fallacy". Life is fascinating, eh?
mm
How can a price have a regress toward a mean when it is the latest sequences of data that determine what the mean is? "
Q, I agree with you in the question. I am not a mathemetician, but have forwarded your question along with some other thoughts I had about this to a friend who is one of the top physicists in the world. Without mucking up the answer, it probably does not apply to absolute numbers, in the strict sense. For instance, a companies earnings can just go up year after year, so the absolute number may not regress to the mean, but some other principle may apply, such as "rate of growth" or "earnings as a percent of productivity"... etc. will pass on the answer if he has one.
I found the principle very apt re: medicine and so-called "alternative" stuff. All the vitamin takers, herbalists, purgers, fasters, colon cleaners, chanters, etc.etc. are at succumbing to this fallacy. In standard medicine I use the principle in a so-called "dishonest" way regularly when I tell a patient to go home, drink plenty of fluids and drink chicken soup when they have a viral illness, because I know no matter what they do they'll get better. Likewise, I try to advise those who will listen that their home remedies, some of which can be expensive or risky, aren't worth it (mega dose vitamin C, "Nyquil", and other OTC junk for example). Sadly, medicine is driven more and more by ill-informed patients these days, so all too many demand therapies that are not necessary, based on past experiences (Like antibiotics for "colds") and doctors are under great economic pressure to please those patients. Sad.
Finally, I was really struck by how much we, who use technical analysis, must fall under the illusions we create in our minds regarding chart reading, as it relates to this "fallacy". Life is fascinating, eh?
mm
