Archive for June 9th, 2014

June 9, 2014

Survivorship Bias

Abraham Wald

rhine zener

Survivorship bias is the logical error of concentrating on the people or things that ‘survived’ some process and inadvertently overlooking those that did not because of their lack of visibility. The concept applies to actual people (e.g. subjects in a medical study), as well as companies, or anything that must make it past some selection process to be considered further (e.g. job applicants).

Survivorship bias can lead to overly optimistic beliefs because failures are ignored, such as when companies that no longer exist are excluded from analyses of financial performance. It can also lead to the false belief that the successes in a group always have some special property, rather than just benefiting from coincidence. For example, if the three of the five students with the best college grades went to the same high school, that can lead one to believe that the high school must offer an excellent education. This could be true, but the question cannot be answered without looking at the grades of all the other students from that high school, not just the ones who ‘survived’ the top-five selection process.

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