Erik Drysdale discusses and gives some formulas, demonstrating on an example that will be familiar to regular readers of this blog.

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Very nice piece by Erik Drysdale – thank you for pointing it out.

1. A higher level view of statistical inference was discussed in this blos based on https://ssrn.com/abstract=3591808

2. A broader perspective motivated by the often verbal representation of findings is to apply the S type error. See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3035070

When he got to “all statistically significant findings are biased”, in bold no less, I lost interest but I’m sure I’ll press on. Nevertheless, I don’t think everyone will be motivated to read a paper that’s clearly factually incorrect in a bolded statement that underlines the premise of the paper, in the first few paragraphs.

I didn’t like that statement either, but it didn’t stop me from going further, and I didn’t regret it. What he means is that generally effect estimates are biased conditional on statistical significance, which is a valid point; later he doesn’t do much market shouting of that kind anymore.

Hi Christian and psyoskeptic,

Thank you for the feedback, I have updated the sentence to make it clearer.