Mathematical Basis for Physical Inference

While the axiomatic introduction of a probability distribution over a space is common, its use for making predictions, using physical theories and prior knowledge, suffers from a lack of formalization. We propose to introduce, in the space of all probability distributions, two operations, the OR and the AND operation, that bring to the space the necessary structure for making inferences on possible values of physical parameters. While physical theories are often asumed to be analytical, we argue that consistent inference needs to replace analytical theories by probability distributions over the parameter space, and we propose a systematic way of obtaining such "theoretical correlations", using the OR operation on the results of physical experiments. Predicting the outcome of an experiment or solving "inverse problems" are then examples of the use of the AND operation. This leads to a simple and complete mathematical basis for general physical inference.Comment: 24 pages, 4 figure

The 2005 European e-Business Readiness Index

Assessment of the eEurope 2005 Action Plan Benchmarking Index “E-Business Readiness Composite Indicator” using data collected by National Statistical Institutes and harmonised by Eurostat, using surveys “ICT usage of enterprises”, with reference years 2003 and 2004. This report contains data from 26 countries as collected in 2004 and as reported by Eurostat in June 2005. Performed analyses include obustness analysis, uncertainty and sensitivity analysis for two categories of ICT (Adoption and Use), univariate analysis of basic indicators; principal component analysis and finally assessment of resulted country rankings and methodological notes.ICT, e-business, adoption, composite, indicator, eEurope, e-Europe, EU, multiple imputation imputation

Bayesian outlier detection in Capital Asset Pricing Model

We propose a novel Bayesian optimisation procedure for outlier detection in the Capital Asset Pricing Model. We use a parametric product partition model to robustly estimate the systematic risk of an asset. We assume that the returns follow independent normal distributions and we impose a partition structure on the parameters of interest. The partition structure imposed on the parameters induces a corresponding clustering of the returns. We identify via an optimisation procedure the partition that best separates standard observations from the atypical ones. The methodology is illustrated with reference to a real data set, for which we also provide a microeconomic interpretation of the detected outliers

European Innovation Scoreboard: New Theoretical Advances and Visualization Tools

Recently, the JRC has been working on theoretical advances for composite indicators building. These advances concern the weighting procedure, probably one of the most delicate and controversial phases of the process. In the ambit of the FP6 project ¿Knowledge Economy Indicators¿, with the Katholieke University of Leuven, the endogenous weighting procedure has been implemented and tested. Another methodological advance in indicators¿ aggregation is the multi-criteria procedure, which tries to resolve the conflict arising in country comparisons as some indicators are in favour of one country while other indicators are in favour of another. This conflict can be treated in the light of a non-compensatory logic and taking into account the absence of preference independence within a discrete multi-criteria approach. A proper visualization of the results is indispensable to communicate the information appropriately and transparently and affects both relevance and interpretability of the results. We provide presentational material that can help improving the way the SII results are presented.JRC.G.9-Econometrics and statistical support to antifrau