Statistical methods in cosmology

The advent of large data-set in cosmology has meant that in the past 10 or 20 years our knowledge and understanding of the Universe has changed not only quantitatively but also, and most importantly, qualitatively. Cosmologists rely on data where a host of useful information is enclosed, but is encoded in a non-trivial way. The challenges in extracting this information must be overcome to make the most of a large experimental effort. Even after having converged to a standard cosmological model (the LCDM model) we should keep in mind that this model is described by 10 or more physical parameters and if we want to study deviations from it, the number of parameters is even larger. Dealing with such a high dimensional parameter space and finding parameters constraints is a challenge on itself. Cosmologists want to be able to compare and combine different data sets both for testing for possible disagreements (which could indicate new physics) and for improving parameter determinations. Finally, cosmologists in many cases want to find out, before actually doing the experiment, how much one would be able to learn from it. For all these reasons, sophisiticated statistical techniques are being employed in cosmology, and it has become crucial to know some statistical background to understand recent literature in the field. I will introduce some statistical tools that any cosmologist should know about in order to be able to understand recently published results from the analysis of cosmological data sets. I will not present a complete and rigorous introduction to statistics as there are several good books which are reported in the references. The reader should refer to those.Comment: 31, pages, 6 figures, notes from 2nd Trans-Regio Winter school in Passo del Tonale. To appear in Lectures Notes in Physics, "Lectures on cosmology: Accelerated expansion of the universe" Feb 201

A Rank Approach to Equity Forecast Construction

The purpose of this paper is to present a rank based approach to cross-sectionallinear factor modelling. The emphasis is on approximating factor exposures in aconsistent manner in order to facilitate the merging of subjective information(from professional investors) with objective information (from accounting dataand/or state of the art quantitative models) in a statistically rigorous way withoutneeding to impose the unrealistic simplifying assumptions typical of more standardtime series models. We deal with the problems of identifying country and sectorreturns by an innovative hierarchical factor structure. This is all discussed fromthe perspective that investment models are not immutable but rather need to bedesigned with characteristics that are fit for their purpose; for example, returningaggregate county and sector forecasts that are consistent by construction

A Behavioral and Neural Evaluation of Prospective Decision-Making under Risk

Making the best choice when faced with a chain of decisions requires a person to judge both anticipated outcomes and future actions. Although economic decision-making models account for both risk and reward in single-choice contexts, there is a dearth of similar knowledge about sequential choice. Classical utility-based models assume that decision-makers select and follow an optimal predetermined strategy, regardless of the particular order in which options are presented. An alternative model involves continuously reevaluating decision utilities, without prescribing a specific future set of choices. Here, using behavioral and functional magnetic resonance imaging (fMRI) data, we studied human subjects in a sequential choice task and use these data to compare alternative decision models of valuation and strategy selection. We provide evidence that subjects adopt a model of reevaluating decision utilities, in which available strategies are continuously updated and combined in assessing action values. We validate this model by using simultaneously acquired fMRI data to show that sequential choice evokes a pattern of neural response consistent with a tracking of anticipated distribution of future reward, as expected in such a model. Thus, brain activity evoked at each decision point reflects the expected mean, variance, and skewness of possible payoffs, consistent with the idea that sequential choice evokes a prospective evaluation of both available strategies and possible outcomes