SURVIVOR BIAS The other challenge in sampling is survivor bias, that is, the bias introduced by ignoring the portions of your universe that have been removed from your data for one reason or another. As a simple example of survivor bias, consider research done by Stephen Brown, my colleague at New York University, on hedge fund returns. While many studies looking at hedge fund returns over time had concluded that they earned “excess” returns (over and above expectations), Professor Brown argued that the mistake many analysts were making was that they were starting with the hedge funds in
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