Statistics lessons from the Coen Brothers
Despite their renowned movies like “The Big Lebowski,” “No Country for Old Men” and “Fargo”, my favorite Coen Brothers flick is their latest- “Inside Llewyn Davis.” Not only does it have a great soundtrack, it also offers a couple of very important lessons in statistics.
The movie follows a week in the life of struggling young folk singer Llewyn Davis as he navigates the Greenwich Village folk scene in the winter of 1961- just around the time folk legend Bob Dylan was becoming famous. Without his own apartment, he tries to make ends meet by crashing on friends’ couches with his guitar in tow.
What makes this movie so original is that this is not the story of Dylan, and how he “made it,” but the guy you would not have heard about- in film critic Bilge Ebiri’s words, “the guy who didn’t make it.” Interestingly enough, in every sector, for every Dylan, there are thousands, if not millions, of Davises. In essence, such winner’s biases are all around us.
For example, most of the books I saw people reading on the beach yesterday in Datça were bestsellers, but you would agree with me that most books, by definition, are not bestsellers. In fact, most ideas for books never end up on the shelves- or on Amazon. Many are not even completed, others rejected by publishers.
You may argue that we read bestsellers because they are more fun to read, if not better written. Similarly, we may be presented with winners because their stories are more interesting to look at- that’s why they probably become winners in the first place. But sometimes, you can learn a lot from studying losers as well.
In a case well-known to students of statistics, statistician Abraham Wald was asked to advise the U.S. Air Force during World War II on where to reinforce the armor of bomber planes. With the limited possibility of extra weight, he suggested areas that did not have many bullet holes in returning planes, arguing that planes that were hit in those areas simply did not return.
Besides, the difference between winners and losers may not be clear-cut all the time. Towards the end of the movie, as Davis prepares to leave a bar after finishing up a gig, the Coen Brothers show us a glimpse of a young Bob Dylan performing a song very similar to the one Davis had just sang.
So maybe Davis was as talented as Dylan after all- and if luck would have it, he might have been the famous folk singer, and Dylan the forgotten young musician. In fact, Davis is based on the 1960s musician, Dave Van Ronk. He is not completely obscure, but I am sure many of you, like me, had not heard of him before.
The fields of business and economics do not give much credit to luck, which is unfortunately very difficult to measure. You have B-school case studies explaining the business acumen of CEOs, but almost never their luck. In economics, the error term of a regression would include luck, along with all the other unmeasured variables.
That error term never gets the attention it deserves, except when it is high, when it hints that your model may be wrong or incomplete. But it may as well be the difference between a Llewyn Davis, or a Dave Van Ronk, and a Bob Dylan.