Wednesday, March 25, 2009
Expert: All Predictive Models Are Wrong
The headline of this post is somewhat misleading but the point is that predictive models are too—even when used properly. Says catastrophe risk management expert Karen Clark: “Model users frequently forget that all models are based on simplifying assumptions, and therefore all models are wrong.”
Clark’s comment appeared in a release by her eponymous firm consulting firm, Karen Clark & Company, announcing a report on the performance of so called “near-term” hurricane models. These models have suffered heavy criticism from Florida government spokesmen, as we reported early last year. The near- or medium term models were designed to replace standard models that failed to predict the anomalous 2004 and 2005 hurricane season.
In late 2006, Florida Governor Charlie Crist said RMS’s medium-term model was based on “unscientific” assumptions and amounted to “big insurance” taking advantage of the people of Florida...
I&T: Expert: All Predictive Models Are Wrong
Clark’s comment appeared in a release by her eponymous firm consulting firm, Karen Clark & Company, announcing a report on the performance of so called “near-term” hurricane models. These models have suffered heavy criticism from Florida government spokesmen, as we reported early last year. The near- or medium term models were designed to replace standard models that failed to predict the anomalous 2004 and 2005 hurricane season.
In late 2006, Florida Governor Charlie Crist said RMS’s medium-term model was based on “unscientific” assumptions and amounted to “big insurance” taking advantage of the people of Florida...
I&T: Expert: All Predictive Models Are Wrong
Permalink posted by markw @ 5:07 AM 
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