Beware the Inferential Leap From a Single Data Point

If you are trying to understand the complex underlying personal characteristics of your client, a potential employee, or even yourself, it goes without saying that you need a good tool (i.e., a good assessment) to measure these not-so-obvious personal features. This is the heart of psychometrics: the science of measuring individual differences (that is, our unique personal characteristics). Typically psychometrics involves gathering multiple responses related to a characteristic to ensure you’re really measuring what you[…]

A Problem: Financial Advice by Birthday

With a variety of interests, behaviors, experiences, personalities, and attitudes about money, we manage finances, invest, and save. Even if we are not directly responsible for financial management, we are involved via spending or generating income. How do financial institutions and advisors provide guidance? They divide us up into groups by our age, gender, net worth, income, and maybe some less-than-ideal measure of risk tolerance. The focus on Millennials is a great example of this: making[…]