Survivorship Bias, Denominator Neglect

A successful subgroup is mistaken as the entire group, due to the invisibility of the failure subgroup. The bias’ name comes from the error an individual makes when a data set only considers the “surviving” observations, excluding points that didn’t survive.

#judgment

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  3. Robert J Zimmer (2013-03-01). "The Myth of the Successful College Dropout: Why It Could Make Millions of Young Americans Poorer". The Atlantic.
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  5. M., Han, L., MD, P., & Singhal, S. (2020, May 27). Major challenges remain in COVID-19 testing. Retrieved July 27, 2020, from https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/major-challenges-remain-in-covid-19-testing
  6. Survivorship Bias: The Tale of Forgotten Failures. (2019, December 02). Retrieved from https://fs.blog/2019/12/survivorship-bias
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  9. Vanguard. (2015, March). What is ‘survivorship bias’ and why does it matter? [Press release]. Retrieved from
  10. Hayes, A. (2020, June 03). Mutual Fund Definition. Retrieved from https://www.investopedia.com/terms/m/mutualfund.asp
  11. https://www.vanguard.co.uk/documents/adv/literature/survivorship-bias.pdf
  12. Elton; Gruber; Blake (1996). "Survivorship Bias and Mutual Fund Performance". Review of Financial Studies. 9 (4): 1097–1120. doi:10.1093/rfs/9.4.1097. In this paper the researchers eliminate survivorship bias by following the returns on all funds extant at the end of 1976. They show that other researchers have drawn spurious conclusions by failing to include the bias in regressions on fund performance.
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