Wednesday 2 December 2015

Luck is measurable

Sometimes when we want to be successful, we need luck; however, we do not know when we have luck and how much luck we have. It is possible to look back and measure how much luck you had in the past. The first thing to do is to list all elements that you feel you can have a control with, e.g. education, time and efforts. Then you need to make a judgement on all things you did in the past, whether it is successful or not. If it is successful, then the outcome is 1; otherwise, the outcome is 0. Then by running a regression you can know how each element affects your achievements. Then you substitute data into each sample and calculate the unobservable heterogeneity term, and the unobservable heterogeneity term is a measurement of the luck if you assume that the God is fair that you have equal amounts of good luck and bad luck.

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