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Stein's example - Wikipedia
Stein's example (or phenomenon or paradox), in decision theory and estimation theory, is the phenomenon that when three or more parameters are estimated simultaneously, there exist combined estimators more accurate on average (that is, having lower expected mean squared error) than any method that handles the parameters separately. It is named after Charles Stein of Stanford University, who discovered the phenomenon in 1955.[1]

An intuitive explanation is that optimizing for the mean-squared error of a combined estimator is not the same as optimizing for the errors of separate estimators of the individual parameters. In practical terms, if the combined error is in fact of interest, then a combined estimator should be used, even if the underlying parameters are independent; this occurs in channel estimation in telecommunications, for instance (different factors affect overall channel performance). On the other hand, if one is instead interested in estimating an individual parameter, then using a combined estimator does not help and is in fact worse.

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Many simple, practical estimators achieve better performance than the ordinary estimator. The best-known example is the James–Stein estimator, which works by starting at X and moving towards a particular point (such as the origin) by an amount inversely proportional to the distance of X from that point.
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february 2018 by nhaliday
Sex, Drugs, and Bitcoin: How Much Illegal Activity Is Financed Through Cryptocurrencies? by Sean Foley, Jonathan R. Karlsen, Tālis J. Putniņš :: SSRN
Cryptocurrencies are among the largest unregulated markets in the world. We find that approximately one-quarter of bitcoin users and one-half of bitcoin transactions are associated with illegal activity. Around \$72 billion of illegal activity per year involves bitcoin, which is close to the scale of the US and European markets for illegal drugs. The illegal share of bitcoin activity declines with mainstream interest in bitcoin and with the emergence of more opaque cryptocurrencies. The techniques developed in this paper have applications in cryptocurrency surveillance. Our findings suggest that cryptocurrencies are transforming the way black markets operate by enabling “black e-commerce.”
study  economics  law  leviathan  bitcoin  cryptocurrency  crypto  impetus  scale  markets  civil-liberty  randy-ayndy  crime  criminology  measurement  estimate  pro-rata  money  monetary-fiscal  crypto-anarchy  drugs  internet  tradecraft  opsec  security
february 2018 by nhaliday
galaxy - How do astronomers estimate the total mass of dust in clouds and galaxies? - Astronomy Stack Exchange
Dust absorbs stellar light (primarily in the ultraviolet), and is heated up. Subsequently it cools by emitting infrared, "thermal" radiation. Assuming a dust composition and grain size distribution, the amount of emitted IR light per unit dust mass can be calculated as a function of temperature. Observing the object at several different IR wavelengths, a Planck curve can be fitted to the data points, yielding the dust temperature. The more UV light incident on the dust, the higher the temperature.

The result is somewhat sensitive to the assumptions, and thus the uncertainties are sometimes quite large. The more IR data points obtained, the better. If only one IR point is available, the temperature cannot be calculated. Then there's a degeneracy between incident UV light and the amount of dust, and the mass can only be estimated to within some orders of magnitude (I think).
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december 2017 by nhaliday