What usually rides the media waves these days? Typically, something newsworthy. Controversial issues. International tensions. Pentatonix posting their latest Christmas YouTube videos. You get the point.
Have you noticed a less-than-obvious commonality among newsworthy items? The commonality is this: they are outliers. Not every day are there protestors on the streets; not every country is on the brink of war; not every YouTube channel features a cappella magic. They are outliers. Do you know what else is an outlier? Someone with an Earned Level of 10 who doesn’t pass an actuarial exam.
Let’s face it – most of us love outliers. Without them, life would be quite mundane with little to discuss. So it is no surprise to find significant rouse around candidates who either pass with a low Earned Level, or fail with a high Earned Level. But what do we call such a group of candidates again? Oh yes, outliers… lest we forget. Personally, I find this quite ironic. Among those who have a natural disdain for outliers, actuaries would rank near the top.
Perhaps this buzz stems from the lack of a balanced view on the matter. Allow me to share three of my perspectives on the Earned Level for your consideration.
Your EL is a Fantastic Gauge of Your Odds
Survey after survey, the same pattern shows up. A user with an EL of 7 or above has a significantly better chance of passing than those with an EL < 7. The surveys in 2013 (3372 responses) show that 91% of users with an EL of 7 or above passed their exam. Of course, there is a survey-response bias in play.
So we came up with a different approach: we attempted to match the names of our users to the SOA’s list of passing candidates. Only exact matches were considered as passing. As expected, the passing percentages via this approach were lower than our survey results. But how did the 7 and above group perform? A 83% passing rate. And what about those who had less than 7? Only 42%. In addition, the pattern of increased odds being linked with higher ELs held true for all five preliminary exams.
If one’s EL does not provide a good estimate of the passing odds, there should be at least one inconsistency with the findings. To quote my Statistics professor: “torture the data; it will confess”. Thus, if you concentrate on the outliers, it will be of no benefit to you.
Stay tuned for Part 2 coming soon.