Data Mining

"Data Mining" is one of those terms that can have either good or bad connotations. The "good" side is that lots of companies have huge databases, and data mining can be an indispensable statistical skill for culling important fcats and insights from the data -- insights that could potentially lead to a competitive advantage, or to the recognition of a critical relationship.

A recent Wall Street Journal article -- "Data Mining Isn't a Good Bet for Stock-Market Predictions" -- highlights the potential negative side of data mining. As I frequently mention in classes, "correlation" is one thing, but "causation" is something else. A relationship discovered in financial, economic, and insurance data should make sense, and should have an intuitive explanatory basis, before being used as a foundation for predictive modeling.

- Rick

"Statistics" is the Word

Always nice when the mainstream media gets it right!

"For Today's Graduate, Just One Word: Statistics," The New York Times, 8/5/09.

- Rick

Actuarial Science a "Lucrative" Degree

“Actuarial Science” has made the list of the “Most Lucrative College Degrees,” according to CNN and its reporting on a National Association of Colleges and Employers survey. Act sci is the only degree in the top 14 that is not an engineering/CS degree.

The ranking is based on college graduates’ starting salaries. I suspect that, if future earnings potential and the possibility of salary increases in the first 5-10 years of a career were considered, actuarial science could well be ranked even higher.

As a whole, the list certainly suggests the importance and power of mathematical skills!

- Rick

Pensions and Actuaries

A commentary in today's Wall street Journal, "Public Pensions Cook the Books." It concerns how two public pension plans in Montana are handling their actuarial services. Must reading for actuaries...

- Rick

Towers Watson

A big merger was just announced in the actuarial consulting world:

Towers Perrin + Watson Wyatt = Towers Watson.

This is being announced as a “merger of equals.”

- Rick

The Public Option

One of the big issues in the current health care reform discussions is the "public option": introducing a public provider to compete with private health insurers. Actuaries and others familiar with the insurance industry have seen this movie before, in health care and other lines of insurance -- with respect to both proposed and implemented public insurers.

Here are a couple of nice articles discussing the public option in an economic context:

(1) "The 'Public Plan' Would be the Only Plan," by Scott Harrington (professor at the Wharton School, University of Pennsylvania), Wall Street Journal, June 15, 2009.

(2) "The Pitfalls of the Public Option," by N. Gregory Mankiw (professor at Harvard University), New York Times, June 27, 2009.

- Rick

A "Brief" Article on Economics

Hmmm... Perhaps economics need not be dull after all...

From MSN Money: "How your undies track the recession," by Michael Brush.

- Rick