CPR Methods Workshop: Yulong Wang “Theory and Application of Extreme Value Theory”

Yulong Wang, associate professor of economics, will present “Don’t Waste the Outliers in your Dataset – Theory and Application of Extreme Value Theory” as part of the CPR Methods Workshop Series.

Extreme values, such as extremely high medical expenditures and cost of catastrophic disasters, are common in practice. A routine method is to treat them as outliers and drop them from the data. However, doing so could incur large bias and substantially misleading statistic inference.

In this talk, we will discuss the effects of these extreme values on regressions and some alternatives that are robust to extreme values. Datasets about medical expenditure, city size and firm size will be illustrated.