From the course: The Data Science of Economics, Banking, and Finance, with Barton Poulson

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Ethical and technical challenges and possibilities

Ethical and technical challenges and possibilities

From the course: The Data Science of Economics, Banking, and Finance, with Barton Poulson

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Ethical and technical challenges and possibilities

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- [Instructor] I want to begin this discussion of ethics with a small mathematical formula. This statement concerns the correlation coefficient which is symbolized by the lower case r there. What this says is that the absolute value of the correlation of any real data, is going to be more than zero. It's never totally random like that. This is going to be less than a perfect one so you can never get things perfectly lined up. In other words, variables are always correlated at least a little bit but never perfectly except in the case of maybe, mathematical co-identities. This statement has ethical implications for people doing data science work in economics, banking and finance. Now, I'd like to go over those issues in just a few minutes. The first thing to remember is that your predictions will never be perfect. That is the correlation between your predictions and reality will never be exactly one. You knew this but it means that you'll always be missing something and that a little…

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