Home > Uncategorized > Additivity — a dangerous assumption

Additivity — a dangerous assumption

from Lars Syll

2014+22keynes%20illo2The unpopularity of the principle of organic unities shows very clearly how great is the danger of the assumption of unproved additive formulas. The fallacy, of which ignorance of organic unity is a particular instance, may perhaps be mathematically represented thus: suppose f(x) is the goodness of x and f(y) is the goodness of y. It is then assumed that the goodness of x and y together is f(x) + f(y) when it is clearly f(x + y) and only in special cases will it be true that f(x + y) = f(x) + f(y). It is plain that it is never legitimate to assume this property in the case of any given function without proof.

J. M. Keynes “Ethics in Relation to Conduct” (1903)

Since econometrics doesn’t content itself with only making optimal predictions, but also aspires to explain things in terms of causes and effects, econometricians need loads of assumptions — most important of these are additivity and linearity. Important, simply because if they are not true, your model is invalid and descriptively incorrect. It’s like calling your house a bicycle. No matter how you try, it won’t move you an inch. When the model is wrong — well, then it’s wrong.

  1. January 26, 2016 at 11:47 pm

    The first problem is attempting to model the collective behavior of billions of minds when each mind has the memory capacity of the entire rapidly growing internet. Here we open the asylum doors for raging egomania.

    Might the cosmological constant work? Does garbage in – garbage out apply to bio computers with a moral imperative?

    • January 28, 2016 at 2:21 am

      Yet, we can and do statistically examine the behavior of large groups without knowing how any particular ‘individual’ in those groups ‘behaves’.

      And, IMO, garbage in, garbage out does apply to bio-computers with a moral purpose.

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