Is this really what passes for statistical analysis in the investment community? From a biomedical statistics background, this analysis so atrocious that I don't know where to start.
This sounds like a good basis of a line-by-line refutation or counterargument on Medium. :)
Does anyone have experience doing survival analysis? I've read a lot of the documentation of CamDavidsonPilon's Lifetimes. maybe i'll give it a shot, seems like the type of thing people would already do to price car insurance
Tesla’s mortality rate (41 deaths per million vehicle years) is so much higher than the average luxury car (13 deaths per million vehicle years) that when comparing the two, the difference is hugely statistically significant. The difference is 28 additional deaths per million vehicle years, with a confidence interval of 11 to 63, and a p-value of 0.0001.
Binomial confidence intervals for individual cars except Tesla provided by IIHS
Binomial confidence intervals for Tesla and groups using Conflint.xls from John Pezzullo
so he is doing some kind of hypothesis testing, using the binomial distribution but I wish he would post the data and spreadsheets used to generate everything. probably some p-hacking going on?
I'm not really that statistically literate, just a computer engineering dropout if someone could explain that'd be cool
The author then went on google and tried to find more articles. Included whatever he could find only for Tesla.
If you're going to go through extra steps to pump Tesla's numbers, then of course they're going to be higher.
Duh.
What he did there is statistically unacceptable.
The medical equivalent would be to compare side effect profile of current best of line treatment done in general populace to results to your new treatment's phase 1 trial results which is done in healthy people only. Then advertise that.
Regardless, can we have the raw data please? Are the rates even meaningful when the incident counts are low? Vehicle years are not the right unit as this counts cars that are not being driven. Actual range driven is the right unit.
That one local death in NL, the guy did double the allowed speed on a stretch where I can hardly hit 20% above the allowed speed accounting for traffic lights and local situation. The one Tesla death with the young kid, the same. Don't put maximum traction hundreds of HP in male hands. We tend to use it (sometimes).
Moreover, they should use the data where miles drive is available, say, from taxi drivers. Oops, that's 0 out of 0 total? :)
For such low incidences, even studentising will not produce right confidence intervals based on normal distribution. Poisson distribution cannot even be used, direct binomial instead, because it is likely that the error due to approximation will be important. (calculate from rule of rare events)
The least they could do is run the same stats for both Tesla and another luxury brand (say, Audi), and then compare like to like.