Here is the funniest academic story you would have ever heard. The MBA Decision science class is tutored by Prof. James Taylor. He is one of the funniest, yet clever and knowledgeable, professors I have ever seen.
This past week he taught about multiple regression (don’t worry about the term) and he wet to explain his work in trying to define a relation between FTSE and JW. FTSE is the financial share index. The equation was something like FTSE100t = 7039.60 – 210.89JWt + et
He seemed to be so proud of his statistical analysis and derivation. We went onto to validate the analysis (there are some set parameters like t-stat, r square, etc). Everything seemed to be just great and the whole class was kind of appreciating his efforts.
He slowly turned back and asked the class, “Why didn’t anyone ask me what is JW? Let me how you what JW is made of. He then switched on the other display which showed both his kids on the sofa. JW is apparently Jake’s Weight – they have been weighing his son’s weight every month and he was trying to correlate Jake’s Weight and FTSE index.
We laughed at being fooled so easily. The moral of he story: Be careful when you try to correlate two “trendy” variables. He sure is genius, isn’t he?
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