Sunday, January 10, 2010

Random Thought: Engineers do "numbers" better than anyone else

I often tell students and other people that "... engineers do numbers better than anyone ..." including economists, finance people, accountants or even scientists.  The origin of my statement is that we combine knowledge of very strong mathematical tools, that include calculus and differential equations (and hence the ability to construct continuously solvable models -- based on fundamentals or heuristics if necessary) as well as experience dealing with experimental data and hence the ability to interpret information and validate models.  No other academic discipline combines all of this.

Well the validity of this thought was demonstrated this past week.  On Thursday job "creation" data were released for the US and the very unfortunate news was that the economy shed another 85000 non-farm payroll jobs.  This was branded "surprising", as has essentially every economic headline has been for the past year.  Until this time, I had not looked at why they (Economists, I guess) were always "surprised" but I had suspected that they did not understand "noise" (fluctuations) that are always present in data.

Well, this is it!!  Take a look at a bar graph of the job loss data.  Note that in November the losses were essentially zero (actually a month ago this number was a few thousand negative and was revised to + 11,000).  So "economists" had predicted some thousands of positive jobs by simply extrapolating the trend!  If this does not happen then they are "surprised"?(##!!)  If they had asked an engineer, she or he would have said that the trend appears to be decreasing from the really bad months, but if a specific number were needed, it would have come with an uncertainty analysis and some sort of error bars.  (In an engineering situation, any relevant fundamental principles would also have been employed.)   From this point of view, a loss of 85,000 in December would not have produced even a little surprise to an engineer.  Our plants have to operate even if the weather is really hot or really cold, if the feedstocks are not exactly what we want or if we need to make some alterations to increase or decrease production!

So as I was saying, Engineers do numbers better than anyone else!


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