Friday, November 24, 2006

Exclusive Brethren = Christians?

I read a pretty depressing news article on the BBC today as I tried to summon up the motivation to work having read about just how badly England are doing at cricket. The article is about a resignation of a politician in New Zealand over his involvement with a sect called the Exclusive Brethren, supposedly a Christian sect. The story is here.

It depresses me that such people claim to be Christian, yet what is a Christian? It is someone who believes in Jesus Christ as their Lord and Saviour, and follows Him. Now to follow Jesus is not to actively go against Jesus' teachings and words. So: according to the box describing them, they don't associate with the outside world. How does that square with Jesus' Great Commission? In Matthew chapter 28 verse 19 Jesus says "Therefore go and make disciples of all nations, baptizing them in the name of the Father and of the Son and of the Holy Spirit". I can't think quickly enough before I really should get on with my work about their ruling that voting is illegal. Jesus said in Mark chapter 12 verse 17 "Give to Caesar what is Caesar's and to God what is God's", i.e. don't disassociate with the state, engage with it. Further, Peter, one of the Apostles, wrote that Christians should "Submit yourselves for the Lord's sake to every authority instituted among men". This command doesn't seem to include bribing officials.

Anyhow, I shouldn't go on. All men are sinful, Christians no less. So in fact I shouldn't sit here writing this blog about how bad other Christians are when I should be doing my work. I'm thankful however that there is a God who forgives man's sins through Jesus Christ.

1 Peter 3:18a - For Christ died for sins once for all, the righteous for the unrighteous, to bring you to God.

Thursday, November 23, 2006

Peter Phillips, data generating processes, and the big bang...

Peter Phillips delivered the third of his Clarendon Lectures in Oxford last night, and revealed that actually, he does believe life is random. He fitted his random walk to the 600 million year dataset as an expression of his belief on how life is. Needless to say, I disagree with him. The Bible tells us God created this world for a reason, for Him and His purposes. Why do I believe the Bible? Because it has an internally consistent message from the first page to the last, which is God's plan for the universe. He created it, He created man, but man rebelled. But this didn't take God by surprise. He said He would punish man, but promised He would send a Saviour for man. This Saviour was Jesus, predicted by many Old Testament books, notably Isaiah. This Jesus chap can be traced in history without the Bible as a man who attracted many followers, yet died suddenly a criminal's death. The four Gospels in the New Testament explain who Jesus was, and why he fulfilled the predictions in the Old Testament for him, showing he was this promised Saviour. Jesus said "I tell you the truth, whoever hears my word and believes him who sent me has eternal life and will not be condemned; he has crossed over from death to life", amongst other things. Then the rest of the New Testament fleshes out Jesus's death and resurrection and what they mean: basically, Jesus was God, and that by believing in Him, we are saved from God's punishment.

So to put it simply, I think there's a lot of order in this world.

On to data generating processes. Do they exist? Some people suggest they don't. What I mean is, do mechanisms exist that generate what we see in the economy, in the world at large around us? When we see GDP growth is 0.4% this quarter, year-on-year, is there something generating this? I think there is. It's something very hard to discover in its exact form, if not impossible. But it doesn't mean it doesn't exist. And I quite like understanding as much as possible about such things; God's given us a world that is good, and set in place such laws of nature, laws of motion, and other such laws of economics, so to speak.

Finally, the big bang. Scientists in Mexico reckon with a new telescope they can look back to what happened at the beginning of the universe. That's great, cos it's exciting to find out more about this world God's created. Will scientists finding out exactly how the world came into being threaten my belief in God and that He created it? No. Just as a scientist can analyse in great detail a cup of tea, giving me a fantastic chemical breakdown of it, these scientists will give us yet more information on this world around us. But the scientist cannot tell me why I made my cup of tea from analysing the tea alone. He has to ask me why I made it. Just the same with this world. Let's ask God why He made it. As I talked about above, it's all in the Bible.

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Tuesday, November 21, 2006

Is life a random walk? And Oldham's fortunes...

Yesterday, in his first Clarendon Lecture in the Economics Department at the University of Oxford, Peter Phillips suggested that a time series could provide the conclusion that life is a random walk. Well, I guess given he talked about estimating numbers for models on particular data series and questioned what these numbers mean, that in fact he wasn't really trying to substantiate in any way the claim that life is a random walk.

Of course he's fitting an econometric model to the world, and that doesn't necessarily shed any light at all on the true underlying data generating process. It was data on the number of species in exitence, going back 600 million years. Of course I don't think that life is a random walk, I don't for one moment believe that the various underlying processes generating this 600 million year data set really suggest everything is random.

Nevertheless, that's what people who deny the existence of God are forced to believe - it's all random. However, through the existence of a man who lived 2000 odd years ago we have God's revelation to a disbelieving world, captured in a book that's internally consistent as to exactly what this Jesus chap was up to. God isn't random, He has a plan, and He's made it known to His world. Will you take a look? Check out here if you want to.

On to Oldham Athletic. I was dissatisfied with my model, and applied an ad hoc solution, contrary to how I believe econometric modelling should take place, although consistent with the idea that the best ways to do econometrics are not the best ways to forecast. Originally the forecast was about 5,700, but with a variable to capture the visit of local rivals, the forecast was raised to 6,179, which I still thoughts too low. However, the model was giving forecasts in the right ball-park, whereas I was way out: the actual attendance was 6,001. Again much lower than I'd have expected, but continuing the trend this season.

But Oldham won 2-0 against local rivals, continuing their good form in the league now to 1 defeat in 12 matches, and 7 wins along the way. Surely soon, if this form continues, attendances will rise?

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Friday, November 17, 2006

A local derby...

...provides another challenge for my Oldham Athletic attendance prediction model. Simply fired through, the model gives a prediction which my eye says is far too low: 5,696. Certainly, based on attendances in the league this season thus far, this seems too high - attendances have barely broken the 5,000 mark. However, Bradford travel only 22 miles to get to Oldham, and the attendances at the previous two matches between the sides at Boundary Park have been 9,381 and 6,982.

So what to do? Are Bradford a special case, counting pretty much as Oldham's closest rivals right now, with the absence of a Wigan or a Stockport in the same division? Unfortunately the tag of closest rivals actually goes to Huddersfield Town at 16 miles away. Furthermore, Huddersfield do appear to bring better travelling followings than Bradford, in my limited experience and memory.

Nevertheless, Bradford and Huddersfield do pretty much count as our only rivals this season, and are rivals that bring large visiting contingents - unlike, for example, Bury. As such, why not a Rivals variable?

Inserting that, and the model predicts a slightly more satisfying 6,179. I still think it's a bit low, but then this season gates have always been pretty low. Bradford aren't on the best of runs (although they've signed a very good player in Tommy Black this week), while the Latics head into this game unbeaten in seven home games and after two consecutive away victories. So maybe, all that accounted for, a gate not much over 6,000 is about right. We'll see.

Oh and while I'm here I might as well predict the result I guess. 3-1 Oldham. No rationale for it. Come on Oldham!

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Wednesday, November 08, 2006

Econometricians dabbling with Christianity...

As I wrote my response to Ed Glaeser yesterday, I came across a number of interestingly titled papers, and before I knew it I was on a trail back to Ed Leamer, who Ed Glaeser is a colleague of, and whom Glaeser recommends all should follow when doing econometrics. It so happens I disagree with this on econometric terms, as my response should point out (if it doesn't, I'll be working on that!), and I also have bones to pick about Ed Leamer's understanding of God and Christianity, comments that spawned papers titled "Sinning in the Basement: What are the Rules? The Ten Commandments of Applied Econometrics " by Peter Kennedy, and "Applied Econometrics without Sinning" by my supervisor, David Hendry.

Kennedy's use of Christian language is an outpouring of a work by Edward Leamer in 1978, which described econometrics along the lines of the building where he was apparently taught it - on the bottom floor were the applied guys churning out econometric models, and on the third floor were the econometric theorists, teaching students about the ideals of the subject, without getting their hands dirty. He was intrigued by how both camps used the same language, but described the former as "sinners in the basement", and the latter as High Priests.

I'm quite unsure of where Leamer got this idea from. Perhaps it could be from the perception of that Christians, well Christian leaders, are somehow perfect, or at least should be (witness the consternation when they're found not to be, and found to be child abuses etc). Hence they occupy this third floor, pure and clean, not getting dirty with the world. Yet this is not the view of Christianity put forward by the inventor of the faith, Jesus Christ. Not only did he (described as our High Priest) get his hands dirty in the world by healing, dining with the masses etc, but he also remained sinless (where sin is defined, as it is in the Bible, as disobeying God). As a result, when Jesus died on the Cross, a death deserved for those who disobey God, he took that punishment, meaning that all who disobey God can avoid punishment, if they believe and trust in Jesus as their Lord and Saviour.

So Jesus knew that, in fact, all occupy the basement, to use Leamer's language. What does this mean for Leamer's model? Well it means not least that even econometric theorists get their hands dirty, and in Glaeser's words, behave opportunistically. Those, such as Leeb and Poetscher, in their 2005 paper, who claim model selection can never deliver consistent regression estimates and make strong claims about it, when their model set-up precludes consistent estimation by any methodology, be it simple regression, model selection or model averaging, are very guilty in this respect.

Only Jesus, and the Father and Holy Spirit, occupy the third floor for the time being. Thankfully, through Jesus heading down the stairs to the basement for a time, we can enter the third floor in time, though not yet - either when we die, or Jesus returns.

Turning to another aspect of Edward Leamer's theology, he writes:
"As you wander through the thicket of models, you may come to question the meaning of the Econometric Scripture that presumes the model is given to you at birth by a wise and beneficient Holy Spirit."
Such blatant use again of Biblical language suggests that this quote is motivated by some understanding of Christianity. However, again it is not the view of Christianity Jesus talked about, and if we're really interested in Christianity enough to write in econometrics papers, we should consider what its founder had to say.

Many of the words of Jesus recorded in the Bible could be used to show that Christianity is not something bestowed upon some people at birth, but not others. For example, in John 3:16 Jesus says "For God so loved the world that he gave his one and only Son [Jesus], that whoever believes in him shall not perish but have eternal life". Further John 20:30-1 says "Jesus did many other miraculous signs in the presence of his disciples, which are not recorded in this book. But these are written that you may believe that Jesus is the Christ, the Son of God, and that by believing you may have life in his name." So being a Christian is about taking the decision to believe in Jesus and what He did, listen to Jesus and work out what believing and following Him means (through the Bible and Jesus' miracles), and doing it.

So just as econometrics isn't about having a particular model provided to you by some divine revelation, neither is Christianity, and in both one must be very careful to learn and to understand exactly what is going on, not what one thinks is going on, from one's childhood memories (econometrics = that undergrad class you had to take, Christianity = primary school).

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Tuesday, November 07, 2006

Econometricians behaving badly...

Edward Glaeser has written a paper about econometricians behaving opportunistically, and how they violate all the assumptions economic theorists have been making for years now about the behaviour of individuals when faced with a set of incentives.

Basically, it's a fallen world, and as a result, people will present bad stuff and cover it up. But it's given me a chance to try and link together my faith and my work a bit, and I've written a response to Glaeser's work, hopefully outlining an alternative method of carrying out econometric analysis which, while not free from opportunism, provides a method for exposing it elsewhere, and providing a transparent way of doing econometrics, if carried out properly. In a lot of respects, econometricians attempting to behave themselves mirror Christians attempting to live in the fallen world before Jesus Christ returns. It's a tentative link, and I'm encouraged that Paul mixed his metaphors quite a bit in his letters to the Corinthians, as I think I've managed that. Have a read, see what you think. Do get back to me with your comments.

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Relatively far out, but never mind... was only the Johnstone Paints Trophy, no-one cares about that... not only did Oldham crash out to Chesterfield, losing 1-0, the attendance was a good 400 below what I predicted, even with my patched up model! The attendance was a pretty pathetic 2,118, while I managed to get my model down as far as 2,504, but not enough...