Wednesday, November 15, 2006

Analysis: Throw Away the Math

What does successful analysis look like?

At the turn of the century, as in the last one, economist Alfred Marshall summarized his rules on analysis.

1. Math is nothing but a shorthand language
2. Translate the equations back into words or theory
3. Illustrate with examples or stories from real life that are important.
4. Burn the math.
5. If no words or stories emerge, then burn the theory – don’t hold on to the numbers.

So when preparing reports and particularly presentations pepper them with real lifanecdoteses and stories and leave the equations and formulae in the trash bin.

Note: The story was related in Brue's "The Evolution of Economic Thought, 5th ed.," pg. 294.

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