Dec 30, 2014

Human Development Index 1980 - 2013

Now that the year 2014 is coming to an end, let's take a look at the Human Development Index (HDI) over the years 1980 - 2014.

The HDI is a tool developed by the United Nations to measure and rank countries' levels of social and economic development.

The HDI is based on four criteria:

  1. Life expectancy at birth 
  2. Mean years of schooling 
  3. Expected years of schooling 
  4. Gross national income per capita. 

The HDI makes it possible to track changes in development levels over time and to compare development levels in different countries.

How does your country rank on HDI?

Wish you all a nice Sylvester evening tomorrow!

Dec 21, 2014

Actuarial Readability

As an actuary, accountant or financial consultant, deep knowledge, expert skills and experience are key to writing an interesting article or paper advice.

However, no matter how much you're an expert, finally you're as good as you can get your message across to your audience.

The art of the expert is to simplify the complexity of his/her research into simple, and for the audience understandable text.

In practice this implies that the expert will have to measure the readability of his papers before publishing.

The two most important issues to tackle are 'readability' and 'text-level'.

Although there are many sorts of tests, both topics are simply covered by the so called  Flesch-Kincaid Readability Test.

Let's take a look ate the two simple test formulas of this test:

Flesch-Kincaid Readability Test

Flesch Reading Ease Score

FRES = 206.835 – (1.015 x ASL) – (84.6 x ASW)

Flesch-Kincaid Grade Level

FKGL = (0.39 x ASL) + (11.8 x ASW) – 15.59

ASL  = average sentence length
number of words divided by the number of sentences

ASW = average number of syllables per word

number of syllables divided by number of words

Texts with a FRES-score of 90-100 are easily understandable by an average 5th grader and scores between 0 and 30 are best understood by college graduates.

Some examples of readability index scores of magazines:
- Reader's Digest Magazine: FRES = 65
- Time magazine: FRES = 52
- Harvard Law Review: FRES = 30

The FRES-test has become a U.S. governmental standard. Many government agencies require documents or forms to meet specific readability levels. Most states require insurance forms to score 40-50 on the test.

Where to test your documents?

Besides matching the FRES and FKTL scores in your document, as a guideline try to establish the next English text-test-characteristics
  • Average sentence length 15-20 words, 25-33 syllables and 75-100 characters.
  • Characters per word: < 7
  • Syllables per word: 1.5 - 2.0
  • Words per sentence: 15 - 20

This blog text resulted in scores:
- Flesch-Kincaid Reading Ease 64.7
- Flesch-Kincaid Grade Level 7.2
- Characters per Word 4.4
- Syllables per Word 1.5
- Words per Sentence 11.8

As an example we test the readability of one of the articles of the Investment Fallacies e-book, as published by the Society of Actuaries (SOA) :

By Max J. Rudolph, published in 2014

The readability outcome is as follows:

Readability Score 'The Best Model Doesn’t Win'

Reading Ease
A higher score indicates easier readability; scores usually range between 0 and 100.

Readability Formula

Grade Levels

A grade level (based on the USA education system) is equivalent to the number of years of education a person has had. Scores over 22 should generally be taken to mean graduate level text.

Readability Formula
Average Grade Level

Text Statistics
Character Count 7,611
Syllable Count 2,531
Word Count 1,495
Sentence Count 98
Characters per Word 5.1
Syllables per Word 1.7
Words per Sentence 15.3

Actuarial Texts
With regard to public financial or actuarial publications a FRES-score of around 50 assures, that your publication reaches a wide audience. Even in case you're publishing an article at university level, try to keep the FRES-score as high as possible.

If you write an academic paper, you may use the online application Word and Phrase to measure the percentage of academic words. Try to keep this percentage below 20% to keep your document readable. The publication 'The Best Model Doesn’t Win' would score 17% on academic words......

Next time you write a document or make a PPT presentation, don't forget to